Google-Backed Edtech Startup Cuemath’s FY22 Loss Surges 66% To INR 216.6 Cr

Edtech startup Cuemath’s standalone net loss widened 65.7% year-on-year (YoY) to INR 216.6 Cr in the financial year 2021-22 (FY22) on the back of a sharp jump in legal professional charges and employee benefit expenses.

Cuemath had posted a net loss of INR 130.7 Cr in FY21.

The rise in Cuemath’s net loss in FY22 was in line with the increase in its operating revenue, which jumped 64% to INR 148 Cr in FY22 from INR 90.8 Cr in FY21.

As a platform that offers mathematics-focused online learning programs on its platform for K-12 students, Cuemath earns a majority of its revenue from the sale of services by facilitating after-school coaching and training services. In FY22, franchisee fees contributed INR 12.9 Cr to its sales revenue as against INR 20.5 Cr in the prior fiscal, while it earned INR 132.4 Cr in revenue from teaching versus INR 64.4 Cr in FY21.

Including other non-operating income and interest income, the startup’s total revenue stood at INR 152.9 Cr in FY22, up 63.3% YoY.

Meanwhile, Cuemath’s total expenses surged 1.6X to INR 369.6 Cr in FY22 from INR 224.3 Cr in FY21. 

The edtech platform spent a total of INR 125.5 Cr towards employee benefits in FY22 as against INR 69 Cr in FY21. Employee benefit expenses accounted for almost 34% of its total expenses during the year under review. In that, the startup spent INR 102.7 Cr on salaries and wages in FY22, which was a 2X rise YoY. It also spent INR 17.7 Cr on employee stock option scheme and employee stock purchase plan.

Legal professional charges also saw a sharp jump, rising 2.2X YoY to INR 98.8 Cr in FY22.

On the other hand, Cuemath’s expenditure towards advertising and promotions increased to INR 96.6 Cr in FY22 from INR 81.5 Cr in the previous year. It must be noted that the startup launched multiple ad campaigns featuring Bollywood actor Akshay Kumar during the year.

Its IT expenses also rose 2.1X to INR 18.4 Cr in FY22.

Founded in 2013 by Manan Khurma and Jagjit Khurma, Cuemath has a presence in over 80 countries. Besides Google, the startup is backed by other marquee investors like Sequoia Capital, Alpha Wave Incubation, and Lightrock India. In June last year, it raised $57 Mn in a fresh equity funding round led by Alpha Wave to strengthen its products and services and scale the business.

Cuemath competes with edtech majors like BJYU’S, Vedantu, and Unacademy. All of these edtech platforms have witnessed a sharp rise in losses and expenses in the past few years and have fired thousands of employees since last year.

While BYJU’S is yet to file its financial statements for FY22, it saw a sharp 20X rise in its net loss to INR 4,588 Cr in FY21. Meanwhile, Unacademy’s loss widened 85% to INR 2,848 Cr in FY22, while Vedantu’s FY22 loss widened to INR 696.2 Cr from INR 616.2 Cr in FY21.

Besides mounting losses, these startups have also been hit hard by the ongoing funding winter and the economic downturn. Indian edtech startups have laid off over 9,000 employees since March 2022, as per Inc42’s Layoff Tracker.

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