Cuemath’s revenue shot up 3.7X to Rs 91 Cr in FY21

Demand for edtech platforms skyrocketed in the past two years resulting in bumper growth for some startups. One such company is Google-backed Cuemath which witnessed a notable 3.7X jump in the last fiscal of FY21.

Cuemath’s operating revenue ballooned 3.7X to around Rs 91 crore in FY21 from Rs 24.4 crore in the preceding fiscal year, the company's annual filing shows.

Cuemath offers one-on-one Math classes for the K-12 segment and helps students prepare for school and competitive tests. In September 2021, the eight-year-old company claimed to have 200K students in over 20 countries across the world. 

Teaching was the main source of income for Cuemath during the financial year ending March 2021, contributing over 70% of its total revenue. This income has jumped to Rs 64.41 crore in FY21 from Rs 1.4 crore in FY20. Its income from franchise fee increased 4.5% to Rs 20.51 crore in FY21 from Rs 19.62 crore in FY20.

In 2019, the company entered into an agreement with the teachers where it acts as a franchisor and provides access to the data, tools, learning materials, syllabus, etc. to the teachers (franchisee) for teaching mathematics, computing and aligned subjects to students and charges franchise fees.

With over 3X increase in operating revenues, the total expenditure of Cuemath also jumped 2.7X to Rs 224.32 crore in FY21 from Rs 83.76 crore during FY20.

Advertising and promotional expenses emerged as the largest cost centre for the company, forming over 36% of the total expenses. This cost surged 4.3X to Rs 81.51 crore during FY21 from Rs 19.1 crore in FY20.

Employee benefit expenses were the second major cost contributing nearly 30% of total expenses. This expense grew by 78.3% to Rs 69 crore in FY21 from Rs 38.7 crore in the preceding fiscal year (FY20).

Legal and professional fees, payment gateway charges, and communication costs stood at Rs 43.63 crore, Rs 5.53 crore, and Rs 5.17 crore respectively with a 9.5X, 5X, and 1.4X increase.

In line with revenues and total expenses, the losses of the edtech platform also jumped 2.3X to Rs 130.7 crore in the financial year 2021 from Rs 55.33 crore in FY20. On a unit level, the Bengaluru-based company has spent Rs 2.47 to earn a single rupee.

While the total expenditure of the company increased by 2.7X , the cash outflows increased by 1.5X to Rs 54.72 crore in the last fiscal year from Rs 36.3 crore in FY20. Its EBITDA margin has also improved by 466 BPS to -135.8% in FY21 from -182.4% in FY20. 

Cuemath has shown noticeable growth in scale during FY21, but the company’s expenses also grew at a rapid clip. The rise in expenses indicates its priority of growth over unit economics. Its scale and expenses are likely to go up in the ongoing fiscal as well since the company had raised $40 million at the end of FY21. 

Showing growth is a priority for Cuemath because it’s in the market to raise $100 million and may become the next unicorn from the edtech space.