Sequoia-backed Cuemath sacks 100 employees, founder Manan Khurma returns as CEO

Representative image

Sequoia Capital-backed online math learning platform Cuemath has become the latest edtech firm to lay off employees while restructuring its management, with its founder Manan Khurma returning as its full-time CEO as the global edtech landscape worsens.

Cuemath has laid off about 100 employees, a spokesperson for the company told Moneycontrol. The current CEO of the company, Vivek Sunder, who previously served as the chief operating officer at Swiggy, will transition from his full-time role and will continue to work with the top management at Cuemath in an advisory capacity, Khurma said in a LinkedIn post on May 8. Sunder will focus on acquisition funnels and go-to-market strategies, Khurma said.

“Given the need to deeply focus on building a great learning and consumer experience, I will get back into the role of running the company day-to-day as CEO,” Khurma said in the LinkedIn post.

“In addition, some functions and roles will also be rationalised, to reflect our increased focus on learning and consumer experience and retention. While this will impact some talented people who have contributed a lot to Cuemath, we are committed to supporting our affected colleagues with everything they need to ensure a smooth transition into the next phase of their professional journey,” Khurma added.

Cuemath’s move to lay off employees and restructure management comes a year after the company raised close to $60 million in a round led by Alpha Wave, which doubled its valuation to $407 million making it an edtech soonicorn (soon-to-be-unicorn). Besides Alpha Wave and Sequoia Capital, Cuemath counts Lightrock India, Google parent Alphabet’s independent growth fund CapitalG, Manta Ray, and Unitus as its investors.

Last week, Cuemath reported a widening loss of Rs 217 crore on a consolidated basis for the fiscal year ending March 2022. While the company saw its operating revenue surging 62 percent in FY22 (2021-22) from a year earlier, its expenses jumped 65 percent, which widened its loss. Cuemath spent nearly Rs 128 crore on employees alone.

Founded in 2013, by Khurma and Jagjit Rai Khurma, Cuemath offers an after-school online math program for K-12 (kindergarten to class 12) students. Cuemath claims that its courses are certified by Grant Thornton and claimed that it also has accreditation from STEM and Google for Education. The company has raised close to $130 million in a mix of equity and debt funding to date.

Cuemath has joined a growing list of edtech companies that are laying off employees and reimagining their management decisions due to a slowdown in demand for online learning, as schools, colleges, and physical tuition centers are reopening. Edtech companies have taken other initiatives, such as shutting down non-core verticals and reducing spending on advertisements, among others, to save costs.

In his LinkedIn post, Khurma also highlighted the impact of artificial intelligence (AI) on edtech companies.

“The edtech ecosystem is seeing an inflection point - conservative capital markets, rapidly changing technology and AI ecosystems, and so on. The path forward for education companies - including Cuemath - needs to be completely anchored in creating learning outcomes for the end stakeholder - the student,” he said.

Khurma’s perspective on AI comes just a week after US-based Chegg Inc warned of AI disruption, which resulted in its stock plunging over 43 percent in the past five days.