PhysicsWallah (PW) looks to be on the verge of raising a new large round, despite the edtech industry having been through a protracted period of what is known as the “funding winter.” Three sources with knowledge of the conversation told the media that new investors will spearhead the fresh funding, while existing investors like Westbridge and GSV Ventures will also take part.
“PhysicsWallah is set to raise $150 million from new and existing backers,” said one of the sources requesting anonymity. “The terms of the deal have been sealed and the transaction is likely to be public soon.”
For the company led by Alakh Pandey, this will be its second funding round in the previous two years. In June 2022, PhysicWallah completed a $100 million Series A round led by GSV Ventures and Westbridge.
“PhysicsWallah will be valued at around $2.8 billion in the new round,” said another source.
PhysicsWallah’s Series A funding valued the company at $1.1 billion, so this represents a 2.5X increase in valuation.
Westbridge and PhysicsWallah did not immediately respond to inquiries. In the event that they reply, their remarks will be retained.
As of the Series A round, WestBridge reportedly owned 2.4% of PhysicWallah, while GSV held 1.44%. Alakh Pandey and Prayeek Maheshwari, the company’s co-founders, together own 86.54% of it.
Originally providing only online IIT/JEE coaching, PhysicsWallah has grown into a full-fledged education company that also provides offline coaching, schools, colleges, and programs for upskilling. 35% of the collection comes from offline coaching (via Vidyapeeth and Pathshala), while sources indicate that JEE and NEET coaching accounts for about 30% of the company’s revenue.
PhysicsWallah’s revenue increased 3.3X to Rs 779 crore in FY23, but the company has not yet released FY24 figures. Meanwhile, in FY23, the company’s profit dropped by over 90% to Rs 8.87 crore.
The company made 120–150 employee layoffs in November of last year in an effort to reduce costs.
In the first half of 2024, edtech startups reportedly raised a mere $138 million through 21 deals, according to the media. The decline from $456 million in 2023, $2.3 billion in 2022, and $5.8 billion in 2021 is significant.
The investment news is the clearest indication yet of investors’ faith in PhysicsWallah’s long-term prospects. For love or money, other edtechs have just not been able to match this amazing loyalty and credibility with the student body.
Additionally, the valuation shows how long investors are willing to wait for the company to fulfill its stated goals and realize its potential. Given the emasculated state of the competition, a funding round in this environment will not only buy PhysicsWallah some time, but also provide the gunpowder to scale up at a much lower cost.
