Online math learning platform Cuemath has sacked 100 more employees as the Peak XV Partners (formerly Sequoia Capital India)-backed startup looks to reduce costs amid a challenging macroeconomic environment for edtech companies.
"..unfortunately, our revenue and cost trajectories are still divergent from expectations, and our problems are compounded by the bad macro situation around capital availability, particularly for edtech," Cuemath's founder and CEO, Manan Khurma, told employees in an email on August 25.
"This means that we will have to move to a leaner team structure, in which some roles will get redundant. That exercise is being carried out today," he added. Moneycontrol has viewed a copy of the email.
A spokesperson for Cuemath confirmed the development to Moneycontrol.
Cuemath, also backed by Alpha Wave Global, had raised $57 million in June last year at a valuation of more than $400 million. The company had sacked about 100 employees in May to improve efficiencies amid a worsening landscape for K-12 edtech globally.
"Post the May-8th exits, I had said that hopefully the company will not need to take a similar action again. And at that point, I had full conviction in saying that. But clearly, I had underestimated the extent of the turnaround required to get the company into a healthy situation," Khurma told employees in the mail.
"For what it's worth, I and our leadership team worked very hard in the last few weeks to avoid this outcome. But we've come to the conclusion that we still have a long way to go and this action is inevitable," he added.
When Cuemath announced layoffs in May, Khurma had returned as its full-time CEO, taking charge from Vivek Sunder. Sunder had joined Cuemath from Swiggy, where he was the chief operating officer.
Cuemath's move to fire more employees comes at a time when investors are taking a harder look at edtech companies in India, amid a post-Covid pull back and the troubles faced by the country's largest edtech startup, Byju's. The K-12 (kindergarten to class 12) segment, particularly has been hit the most. According to data compiled by Moneycontrol through Tracxn, investments into edtech companies have tanked over 80 percent so far in 2023.
In an interview with Moneycontrol in July, Khurma also said that investors are now likely to approach the Indian edtech landscape with heightened scepticism due to the repercussions of Byju's challenges across the online education sector in India.
He further said that he saw Cuemath's domestic business growing slower than its international operations as he felt the depth of the country's market was limited.
Founded in 2013, by Manan and Jagjit Rai Khurma, Cuemath offers after-school online math program for K-12 students.
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