Cuemath bags Rs 21.75 Cr in a mixed round of debt and equity

Mathematics focused edtech firm Cuemath has secured Rs 21.75 crore as a part of its ongoing Series B round from its existing backer Trifecta Capital. The infusion is a mix of debt and equity. 

This is the first investment for Cuemath this year. In December, the Bengaluru-based company had raised Rs 39 crore led by Manta-Ray Ventures. Entrackr had exclusively reported about the Series B2 shares allotment to the London-based early-stage VC firm.

Cuemath has issued 130 Series B2 non-convertible debentures (NCD) at Rs 10,00,000 each to Trifecta Venture Debt to raise Rs 13 crore in debt, shows regulatory filings. The venture debt firm also picked up 10,511 Series B preference shares at an issue price of Rs 8,329.5 per share to invest the remaining Rs 8.75 crore.

The Series B NCDs carry a coupon rate of 14.6% per annum having a tenor of 33 months. Post allotment, Trifecta Capital will control 4.41% preference capital in Cuemath. 

According to Entrackr sources, this is likely a bridge funding round and had materialized almost 5 -6 months ago. “Cuemath is in conversation to raise a large round from multiple American investors. Some talks also progressed into the advanced stage, and it’s likely to raise a new funding round soon,” said one of the sources on condition of anonymity. 

Cuemath’s founder and CEO Manan Khurma confirmed that the company is in the process to raise Series C round. “At this point, I can’t go into the round size,” he said while responding to our queries.

It’s worth noting that Cuemath hasn’t raised any capital in 2020. On the other hand, its peers such as Byju’s, Unacademy, Vedantu and several others have raised a substantial amount.

Cuemath provides after-school maths classes and uses physical worksheets, quiz cards with other tablet-based in-house content. With 5000 centres in India, Cuemath claims to have conducted 25 million classes for over 100,000 students in the country. 

It mainly targets students from lower kindergarten to standard ten and operates on a micro-franchise model, where local tutors sign up with the company to conduct classes at their home. The firm also ramped up its online offering by launching Cuemath LEAP – a live, online, interactive program that caters to children from grade 7 to 10. 

“Our digital platform is scaling very fast. It now has close to 500,000 hours of live classes. We have seen a 4X growth in the last six months as the digital classes have taken off,” added Khurma.

The seven-year-old firm had begun its Series B round with Rs 100 crore infusion from Alphabet Inc., and Capital G. Sources also emphasized that its operations in the US have been churning significant revenue. The company forayed into the US and Canadian and other global markets late last year.

*The story has been updated with Cuemath’s founder and CEO Manan Khurma inputs.