India’s ed-tech space is in crisis with down-rounds, layoffs and the implosion of Byju’s, but one company seems to be be bucking the trend.
Ed-tech company PhysicsWallah has more than doubled its valuation in a new funding round. PhysicsWallah raised $210 million in a round led by investors including Hornbill Capital, Lightspeed, GSV and Westbridge. The round valued the company at $2.8 billion. PhysicsWallah had become a unicorn in June 2022 with a valuation of $1.1 billion, so it’ s managed to grow its valuation 2.5x in just over a year.
PhysicsWallah’s fundraise comes at a bleak time for the ed-tech sector. India’s flagship ed-tech company, Byju’s, is battling for survival and has seen its valuation plummet 99% this year. Other ed-tech unicorns, including Unacademy and Vedantu have laid off hundreds of employees, and haven’t raised new funding rounds.
But PhysicsWallah seems to have gone from strength to strength. Its revenue surged 3x to Rs. 804 crore in FY23. It managed to remain profitable, and reported a profit of Rs. 8.9 crore in the period. In comparison, most other ed-tech startups are yet to report profits, even as they are nearing 10 years of operations.
PhysicsWallah, though, was built a little differently. It had started off as a YouTube channel, where founder Alakh Pandey taught physics concepts for competitive exams. The channel grew in popularity, and Pandey become what’s known as a “star faculty” — someone who’s managed to create a loyal following among engineering exam aspirants. Such was his clout that Unacademy reportedly offered him a Rs. 40 crore salary to join and teach on their platform.
Pandey, though, refused, and continued running his YouTube channel. It was a decision that was probably for the best — PhysicsWallah’s channel now has an astonishing 12.8 million subscribers. It’s also become a proper company — it offers coaching plans to students, and has a wide selection of teachers and educators. PhysicsWallah has also aggressively expanded offline, and has 58 offline centers across various Indian cities, which contribute one-third of its total revenue.
All this has led to personal success for Alakh Pandey. He’s now the 9th richest person on India’s young rich list, and at the age of just 32 boasts of a net worth of Rs. 4,500 crore. And with his company doubling its valuation while continuing to remain profitable, its business model can offer a path to India’s ed-tech space in how to thrive in these seemingly difficult times.