Leap raises another $65M
But is the macro deteriorating too much? Let's dive in.
What’s Happening in the Market
Leap raised a $65M Series E equity round last month, bringing their total funding to $200M in equity since their launch in 2019. That’s a crazy amount of funding–especially since it’s pure equity! Leap helps students find study abroad programs, apply for visas, access funding, and persist / succeed through those programs. Most of their students are based in India, the second-largest market for overseas education, after China. Roughly 1.3M Indian students studied abroad last year.
But cracks are starting to show
In 2023, more than 130K Indian students came to the US to study abroad, a new record. But in 2024, only 86K F-1 Visas were issued, only slightly above the 80K issued in 2021.
Similar trends are playing out around other top destinations for foreign students. In the UK, Indian nationals have ceded the #1 stop of foreign Visa holders back to Chinese nationals.
In Canada, approval for foreign study permits declined by over 50% from 2024 to 2023. This comes after a December 2023 announcement by the Ministry of Immigration which requires proof of $20K, a 200% increase over the $10K requirement that had been in place for decades. In January 2024, the Minister of Immigration, Marc Miller, announced a cap on international students that will limit study permits by about 35% (partially as a response to the housing and infrastructure burden that international students place on their host country, real or not).
40% of Canada’s international students come from India, versus 2% from the US and 12% from China.
There’s already a growing backlash to Visas in the US. Nearly 50K Indian students studied in Germany last year, which will almost certainly decline after this week’s elections, where the far-right AfD came in second. The AfD will be a big player in the new government, and the party’s platform explicitly calls for restrictions on all types of immigration, including international students.
Slowing market, growing market share?
So a $64M equity raise, but a deteriorating macro-environment for Leap? What gives? How are investors still so bullish? Almost all of their markets are going to increase restrictions on international student Visas.
There is, of course, a totally plausible explanation for Leap’s valuations, which is that they are growing their market share within the international study abroad market, and leveraging AI to scale services more affordably. This is, of course, what Leap says in their fundraising announcements. Their investors are all phenomenal, including Owl Venture. Their equity funding is also phenomenal in this unpredictable interest rate environment, especially compared to the debt financing that GoStudent and Preply have had to take on (see our 2025 Predictions here where we predict the rise of EdTech zombie firms).
We’re a little skeptical about Leap’s market, given the geopolitical risks, but even with the pullbacks (35% down in Canada, 30% down in the US, etc.), there will still be over a million Indian nationals studying abroad–and many of them will be accessing financing through LeapFinance, or applying via LeapScholar.
We’ll be keeping an eye on these Visa numbers this year, which in turn will inform how Leap does in the short term.