Peak XV-backed Cuemath forays into offline space with first physical centre in Gurugram

Manan Khurma- CEO - Cuemath

Life has come full circle for Cuemath. The Peak XV-backed company, on November 28, forayed into offline space, joining a list of edtech startups that opened physical centres over the last two years after the pandemic.

“The long-term strategy for India definitely has to include offline as a major component,” Manan Khurma, the founder and CEO of Cuemath who inaugurated the new centre recently, told Moneycontrol.

Khurma, who founded Cuemath in 2013, initially started with a model where the company’s unique curriculum reached students in the kindergarten to standard 12 segment with the help of stay-at-home, qualified teachers taking classes out of their homes. The company transitioned to an online model at the break of the pandemic.

“Earlier, it was at home centres where no capex was involved but this time, it will be retail centres run by the company,” added Khurma.

According to Cuemath, the newly launched learning centre is a physical setup that includes maths classrooms, maths play areas with physical maths manipulatives, and a maths library.

This follows Khurma’s earlier statement to Moneycontrol on how some of the consumers going back offline after the pandemic impacted the company's India plans. Back then, Khurma said that the Indian market, which constituted about 35 percent of its revenues, would come down to 25 percent or less next year.

“Next year is still foundation building, so we are not adding focus on revenue growth in our plans. The year after, we can then go aggressive and start driving meaningful revenue for the business. But at least for the coming year, the bulk of our growth will continue to come from our international business,” he added.

Plans for offline expansion

With prior experience in offline business, Khurma believes the company has its job cut out. He said Cuemath, in 2024, will majorly focus on getting the local team right for each centre, focus on building customer experience instead of scaling too fast, and achieving positive unit economics.

The company plans to set up five such centres in 2024 in Gurugram, Abu Dhabi, and Bengaluru, where it has a strong office presence. The company is also present in the US, the UK and Singapore, but it plans to enter these markets after testing the model in its home market, Khurma said.

“We'll run a handful of centres, perhaps less than five, across these two locations. We will really hone the model, the delivery mechanism, the learning experience, and the economics of the infrastructure. Once we feel confident that this is a model that we can go after, in the subsequent year, we will invest more capital,” Khurma said.

The company counts Alpha Wave, Lightrock India, Peak XV (formerly Sequoia Capital India), CapitalG (formerly Google Capital), Manta Ray, and Unitus among its prominent backers. In June 2022, it had raised $57 million, doubling its valuation to $407 million.

Khurma believes the company is well positioned to fund the first wave of centres with the funds in its bank. “If we do decide to scale this model up and set up the next batch of centres, then we could potentially look at a fund raise,” he added.

This comes after the company let go over 200 employees in two layoff rounds in May and August, this year. Khurma believes that Cuemath is now in a stable situation and does not foresee more cuts in workforce.

He added that the company plans to hire about 1,000 to 2,000 tutors in the next six months to support its offline expansion.

To be sure, the edtech sector had witnessed two consecutive years of hypergrowth in the pure online model with a spurt in demand for remote learning due to the pandemic-induced lockdowns.

However, the back-to-offline trend began in May 2022, when edtech unicorns Byju’s and Unacademy made forays into offline. The move by the two biggest edtech unicorns of India also highlighted the slowdown in demand with the pandemic restrictions easing and schools and incumbent tuition centres opening up.