Solo Entrepreneur Building a Venture Scale EdTech Company from India: Cuemath Founder Manan Khurma (Part 4)

Sramana Mitra: How were the teachers acquiring students from the neighborhood?

Manan Khurma: Mostly the teachers were relying on their personal networks.

Sramana Mitra: Word-of-mouth.

Manan Khurma: Yes, or you go to your complex and do an event. It was mostly organic stuff. This is how we grew on the demand side for the first few years. We now spent money for acquiring demand. We were getting teachers on board and they were getting students on board.

Sramana Mitra: What was the economics of this business during that period?

Manan Khurma: The arrangement we had with the teachers was a revenue share model where the fee that was being collected would be shared in a certain ratio between the teacher and Cuemath so that the teacher retains the majority. The teachers get 60%. For that 40%, we were providing the entire learning system to enable the teacher to deliver these classes. We were also providing basic marketing support like collaterals, branding materials, and so on.

Sramana Mitra: Were they branding them as Cuemath centers?

Manan Khurma: Absolutely. In the first few years, the teacher’s brand in a hyperlocal region would be more powerful. Many of these teachers may not have prior teaching experience. What we are looking for is not traditional teaching experience. What we are looking for is a strong math background. You must have empathy for the student. Other than that, we are not looking for traditional teaching experience. It means that many of our teachers don’t have prior traditional teaching experience.

Sramana Mitra: What kind of revenues did you get in this mode?

Manan Khurma: We had 500 students. Each student was paying 1,500 Indian rupees. That’s about $10,000 of monthly revenue. Then we raised our first round of investment. That was a seed round that was done by Unite Us Seed Fund. They put in about $150,000 when we had reached about $10,000 of monthly revenue.

Sramana Mitra: That was in 2015?

Manan Khurma: Yes, that allowed us to expand our base to 500 teachers and about 3,000 students. This happened over the course of 2016. Because of this growth and because of the innovative business model, investors took notice. We ended up doing our first venture capital round in 2016. This was led by Sequoia. They put in about $4 million back then. With that round of capital, we had another spurt of growth. From 500 teachers, we scaled to 2,500 teachers over that year. In 2017, we closed our next round of venture capital, which was led by Google Capital. That was $15 million.

Sramana Mitra: After the Sequoia round, was it still word-of-mouth teacher recruitment?

Manan Khurma: We started advertising. Most of our advertising was digital. We also had teachers coming in by referrals. The same thing was happening on the student side. Even when we raised the Sequoia round, we didn’t do any advertising on the student side. Teachers were still acquiring students. That model worked well for us. It was only later that we started advertising on the demand.

This segment is part 4 in the series : Solo Entrepreneur Building a Venture Scale EdTech Company from India: Cuemath Founder Manan Khurma
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