Edtech startup Cuemath, backed by Peak XV Partners, has reportedly taken further steps to reduce its expenses by letting go of around 100 employees. This move comes as the company continues to grapple with a challenging financial landscape, compounded by the current macroeconomic situation affecting capital availability in the edtech sector.
Founder’s Address to Employees
In an email sent to employees on Friday (August 25), Cuemath’s founder and CEO, Manan Khurma, acknowledged the disparity between the company’s revenue and cost projections. He explained that due to these challenges, the organization is compelled to adopt a leaner team structure, leading to the redundancy of certain roles.
A Series of Layoffs
This recent development marks the second round of layoffs within a span of three months for the Bengaluru-based edtech startup. In May of this year, Cuemath had already laid off around 100 employees, a move that surprised some considering the startup had secured a funding of $57 million only a year prior.
Cuemath Founder’s Reflections on Previous Assurances
After the initial layoffs in May, Khurma had reportedly assured Cuemath’s employees that further layoffs would not be necessary. However, in his latest communication to the workforce, he admitted that he had underestimated the extent of the necessary changes to position the company for a healthier future.
Cuemath Financial Performance and Industry Challenges
Cuemath, established in 2013 by Manan and Jagjit Khurma, offers mathematics courses to K-12 students across more than 80 countries. Despite its global presence and backing from significant investors like Google, Alpha Wave Incubation, and Lightrock India, the company has been facing financial challenges. Its standalone net loss expanded by 65.7% YoY to INR 216.6 crore in FY22, while operating revenue rose by 64% to INR 148 crore. The company is yet to disclose its FY23 financial statements.
A funding slowdown has greatly affected the edtech industry, leading to substantial workforce reductions. At least 22 edtech startups in India, including five out of the seven unicorns in the sector, have collectively laid off nearly 9,871 employees since 2022, according to reports. Additionally, several Indian edtech startups have encountered controversies, including BYJU’S, which has faced scrutiny over corporate governance and delays in filing financial statements.
