Sequoia-backed Cuemath raises $57 million led by Alpha Wave, valuation doubles

Sequoia Capital-backed edtech firm Cuemath has raised $57 million in a funding round led by Alpha Wave at a valuation of $407 million. The company claimed to have doubled its valuation with this round.

All of Cuemath’s existing investors, including Lightrock India, Sequoia Capital India, Alphabet independent growth fund CapitalG, Manta Ray, and Unitus participated in the funding round along with Alpha Wave, the company said.

Cuemath will use the funds to strengthen its product-pedagogy outcomes, the company said, adding that it will also look at other growth initiatives, including acquisitions and partnerships.

The company said it will also look to expand its offerings to more than 100 countries in 2022-23 (FY23) across regions including North America, South America, Middle East, the UK, Europe, Asia Pacific and Africa. The Sequoia-backed company said it is currently present in 70 countries.

“This substantial inbound interest from all our existing investors validates Cuemath as a knowledge expert in the global after-school math tutoring market and signals acknowledgment of the developments over the past few quarters,” said Vivek Sunder, chief executive officer at Cuemath.

“Cuemath has shown promising growth since the last funding. Product innovation and personalization coupled with a low capex model augmented our global scale-up and beefed our conversion rates by 3X. With the best-in-class retention and acquisition engine, we have created a powerful combination of a sustainable and scalable business model,” Sunder added.

Founded in 2013, by Manan Khurana and Jagjit Rai Khurma, Cuemath offers an after-school online math program for K-12 (kindergarten to class 12) students. Cuemath said its courses are certified by Grant Thornton and claimed that it also has accreditation from STEM and Google for Education. Cuemath said it aims to become the top maths teaching platform globally and said its growth will be impactful and efficient and not ‘capital intensive.’

"In every Cuemath class, the student experiences a powerful and personalized combination of a highly visual math curriculum delivered by a rigorously trained, caring teacher,” said Khurana, founder and chairman, Cuemath.

“This has enabled Cuemath to have one of the best retention rates in the industry (80 percent), with half of all new admissions happening via referrals. These industry-leading metrics encouraged all our investment partners to support us yet again in our global math mission,” Khurana added.

Cuemath’s fundraise comes at a time when the edtech sector in India is witnessing a significant slowdown amid a drop in demand for technology-based education solutions, thanks to schools, colleges and physical tuition centers reopening.

Moreover, funding to the overall startup ecosystem in India is drying up amid a slowdown in global financial markets, compelling firms to lay off employees, shut non-core verticals and rationalise advertising and marketing spends.

The funding winter, however, seems to have hit edtech startups the most, who had witnessed hyper-growth over the last two years. Edtech firms have laid off over 3,500 employees since the start of 2022.

“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 start-ups with solid business fundamentals can now establish trust with venture capital firms,” Sunder said.