Cuemath, a Google-backed edtech company, experienced significant revenue growth in FY21 and FY22, with operating revenue increasing by 63.1% to Rs 148.05 crore in FY22. Income from teaching services accounted for 89.5% of the total operating revenue, growing 2X to Rs 132.45 crore in FY22. However, losses widened 3.9X to Rs 216.6 crore in FY22 from Rs 130.7 crore in FY21, with employee benefits forming 34% of the overall expenditure. Cuemath competes with other edtech companies in the k-12 space, such as Byju’s, WhiteHat Jr, Codeyoung, Extramarks, and Vedantu. Cuemath has raised $126 million to date and has a post-money valuation of $400 million.
The problem with that model is stickier than usual costs and now, the risks from AI driven tools that threaten some aspects of the market as well. With the firm offering a hybrid model instead of pure online classes, it has a large potential market to address. However, with a thriving market for tutors across India offering one on one or group tuitions, Cuemaths might find returns from richer markets worth chasing, rather than the possibilities in India.
The statement highlights some of the challenges that edtech companies like Cuemath face in the Indian market. While the company has seen impressive growth in terms of revenue, its losses have also increased significantly, indicating that the cost of scaling up its operations is quite high. Moreover, the increasing use of AI-driven tools in education poses a threat to the traditional model of tutoring that Cuemath is based on.
On the other hand, Cuemath’s hybrid model of combining online and offline classes gives it an edge over pure online players in the market. However, the statement suggests that there is a thriving market for one-on-one or group tuitions in India, which could make it challenging for Cuemath to capture a significant share of the market.
Given these challenges, the statement suggests that Cuemath may need to explore opportunities in richer markets outside India to maximize its returns. Overall, while Cuemath has made some right moves such as focusing on testimonials, the lack of transparency on tuition costs could be a concern for potential customers.