Cuemath, an India-based online maths-tutoring provider, will embark on an acquisition spree after it closes a $100 million Series D fundraise later this year, its chief executive has told EducationInvestor Global.

The organisation, which at present serves more than 200,000 students in more than 20 countries, is seeking to more than double its global footprint by the end of next year, founder and chief executive Manan Khurma said.

In a bid to reach over 400,000 students in 50 countries within the next 18 months, Cuemath is launching a fresh capital raise in “the next few weeks”, the proceeds of which will bankroll bolt-on takeovers worth $5-$15 million, Khurma said.

Acquisition targets could include subscale online tutoring providers and those that have wide distribution channels but have yet to monetise offerings, he added.

Cuemath is also weighing takeovers of companies with in-house product- and technology-development expertise, which could be leveraged to enhance its learning platform. “Very high-quality engineers and product managers” are of interest, Khurma said.

Cuemath is “not averse” to acquiring offline, centre-based tuition providers, Khurma said, in the wake of Byju’s $1 billion buyout of Aakash Educational Services, India’s largest brick-and-mortar tuition provider, in April.

“Right now, we’re thinking the path forward is online-only,” said Khurma. But if there is a scalable distribution channel with an offline component involved, we’d consider it.”

To date, Cuemath has raised around $65 million in venture capital from investment houses including Sequoia Capital, Google, Manta Ray Ventures and Falcon Edge Capital. It is valued at “close to” $200 million, according to Khurma.

Manan Khurma

By the end of Q1 2022, Cuemath “will definitely” cross $100 million in run-rate annual revenue, said Khurma, generated by increased sales in a market he says is worth $20 billion globally.

Currently, around a third of Cuemath’s students are in India, its key market, while its second-largest source market is the US. The firm recently launched in the UK, where it has signed up 4,000 students.

Through a combination of M&A and organic growth, Cuemath is planning pushes in Europe, the Middle East & North Africa (for which it is already building a senior management team in the UAE), Southeast Asia and Australasia.

Cuemath users are connected via an app with tutors in India, who are “rigorously trained” in a bespoke pedagogical methodology designed to provide a better grounding in maths than traditional methods, said Khurma, a qualified engineer and former maths teacher. Cuemath employs more than 10,000 freelance tutors in India, where talent is plentiful and cheap compared to Western countries.

In the US, a subscription to Cuemath costs $100, while in the UK it is £80. Students, on average, spend two-and-a-half-to-three years learning with Cuemath, said Khurma, highlighting “lifetime on platform” as a key internal performance metric, as opposed to industry-standard retention rates.

Of its some 200,000 students, “the large majority” are paying subscribers, Khurma pointed out.

Unlike many online tutoring providers, Cuemath “is not building a horizontal play where we focus on all subjects”, said Khurma. Instead, the organisation does “maths, and maths only”, he added. 

“We don’t see any other major player that’s focusing only on maths.”

Date published: 23 July 2021

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