India faces considerable education challenges: More than half of children are unable to read and understand a simple text by the age of 10, and disparities in learning levels persist between states and between the poorest and wealthiest children. But, with a flourishing social enterprise ecosystem and an appetite among NGOs and policymakers for testing new solutions, India is playing a leading role in its use of innovative financing for development. One such innovative tool is an impact bond, a type of outcome-based financing structure where upfront capital is given to service providers by investors. While evidence on outcome-based financing in education—and impact bonds specifically—is still emerging, there are key lessons to be drawn for the application of such tools to education in India.