Google-backed Cuemath valued at $407 million as experts expect edtech slump

• Cuemath has raised $57 million from Alpha Wave Global, at a valuation of $407 million.
• The edtech startup provides after-school learning programmes for mathematics.
• The Indian edtech firms are expected to face a downwards trend in the near future as schools have reopened.

Even as experts expect the edtech industry to take a downward trajectory in the near future, Google-backed math learning startup Cuemath has raised $57 million. The round was led by Alpha Wave Global at a valuation of $407 million, representing more than 2x jump.

Existing investors Lightrock India, Sequoia Capital India, Alphabet independent growth fund CapitalG, Manta Ray, and Unitus also participated in the round. The company plans to use the new capital to strengthen its product-pedagogy outcomes, hypergrowth initiatives, acquisition and partnerships.

“Cuemath’s latest fundraise is a significant feat given the present industry trends. Valuations have become more realistic with rationalization hitting the market; only those growth-stage startups with solid business fundamentals can now establish trust with VCs," Vivek Sunder, chief executive officer (CEO) of Cuemath, said.

Cuemath was founded in 2013 by Manan Khurma and Jagjit Khurma. The edtech startup — the company which has presence in over 70 countries — provides after-school learning programmes for mathematics for Kindergarten to 12th grade.

Cuemath, which has raised over $100 million till date, had appointed former Swiggy’s chief operating officer Vivek Sunder as its CEO in 2021.

Indian edtech companies staring at a downward trend, say experts

According to several experts and investors Business Insiders spoke to, the Indian edtech firms are expected to face a downwards trend in the near future as schools have reopened.

According to a survey by the Ministry of Education, 80% of students found remote learning ‘burdensome’ and also missed their peers. This changing attitude could slow down acquisition of new customers and also threatens the existing base who might shift to an offline mode.

“Edtech has received massive traction in terms of funding over the last 2 years, however the ability to create retention on products built by some of them is not promising,” Neha Khanna, director at management consultancy firm ValPro, told Business Insider India.

“In such a scenario, it increasingly becomes expensive to acquire a customer given the competitive landscape and the value ascribed to each customer may not be commensurate with such acquisition costs,” she added.

The edtech industry is also expected to be the biggest source of layoffs in the Indian startup ecosystem. So far, edtech companies like Unacademy, Vedantu and Front Row have already laid off about 1,700 people.

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