Bengaluru-headquartered edtech startup Cuemath is back in the funding ground after nearly three years of raising its Series B funding round. Continuing the same round, the company is raising INR 38.82 Cr ($5.45 Mn) from its existing and new investors.
According to the company filings accessed by Inc42, the company in an extraordinary general meeting approved a resolution for the allotment of 46,512 Series B2 shares at a nominal value of INR 100 with a premium of INR 8229,35 to Manta Ray Ventures along with existing investors Capital G and Sequoia India.
The filings showed that Manta Ray Ventures is picking up 100 equity and 22,915 Series B preference shares while Capital G via GC Asia Investments is picking up 9,907 Series B preference shares and Sequoia via SCI Investments V is picking up 13, 692 Series B preference shares.
Cuemath said it plans to use the funding towards capital expenditure and/or operating expenses in line with the business plan. With this investment, Manta Ray will hold 5.8%, Capital G will hold 24.67% and Sequoia will hold a 34.1% stake in the company. The deal is expected to close this month.
Founded in 2013 by Manan Khurma and Jagjit Khurma, CueLearn, provides after-school learning programmes for mathematics, with a unique distribution model: tapping the incremental efforts of women and senior citizens with basic academic backgrounds (but limited or no teaching credentials).
The company’s website shows that it has enabled over 2 Mn math classes with over 40K students studying with them. Cuemath aids students by using maths worksheets and application-based technology under the supervision of trained and certified teachers.
The company offers classes from KG to 6th class at a nearby centre while for classes 7-10th it offers live online classes. CueMath uses physical worksheets, quiz cards, along with other tablet-based content it develops in-house and targets students from lower kindergarten to Class 8. It operates on a micro-franchise model where local tutors sign up with the company.
According to the company filings, Cuemath has improved its revenues in FY19, while losses have also increased. In FY19, the company earned INR 16.04 Cr, a 1.07X Y-o-Y growth, while its expenses were INR 72.37 Cr, a 39% Y-o-Y increase. The company’s losses increased by 27% reaching INR 56.33 Cr. Hence, the company looks to have been focused on operations and has optimised its growth.
In the online live tutoring industry, while Cuemath was one of the few initial players, the industry is now filled with major players such as Tiger Global-backed Vedantu, Multibhashi, WhiteHat Jr among others.
In August 2019, Vedantu raised $42 Mn in a fresh funding round led by New York-based Tiger Global Management and WestBridge Capital. Existing investors Accel, Omidyar India and TAL Education also participated in the round, along with Prince Maximilian of Liechtenstein and founders of Vedantu.
In September 2019, Edtech startup WhiteHat Jr raised $10 Mn (roughly INR 72 Cr) in a Series A round led by existing investors Nexus Venture Partners and Omidyar Network and Owl Ventures. As more and more Indians come online, the addressable market for online learning, skill development and higher education is expanding by the quarter. Indian edtech segment is expected to be a $1.96 Bn market by 2021.