Ed-tech unicorn PhysicsWallah is set to raise $150 million from existing investors including Westbridge and GSV Ventures along with new investors, reports an undisclosed source. This funding for the ed-tech platform has come at a time when the ed-tech sector has not been able to secure effective funds.
The source has also confirmed that the terms and conditions for the deal have already been decided and the transaction would get public shortly. This is set to be the unicorn’s second funding round in the last two years as it had previously raised $100 million in a Series A round led by Westbridge and GSV Ventures with a valuation of $1.1 billion in June 2022.
Another undisclosed source revealed that Alakh Pandey-led ed-tech platform will be valued at $2.8 billion in the new round which is a 2.5X jump in the company’s valuation from the last funding round in 2022. TheKredible reports that after the Series A round, WestBridge held 2.4% of the stake, GSV held 1.44% , while the co-founders Alakh Pandey and Prateek Maheshwari owned 86.54% of the company.
Initially, PhysicsWallah’s online coaching services were limited to IIT/JEE but now it offers education across a variety of exams and programs and operates offline coaching centres as well (Vidyapeeth and Pathshala). While JEE and NEET coaching form 30% of its revenue, offline coaching contributes 35% of the total.
To date, PhysicsWallah has acquired 6 organizations including Knowledge Planet, iNeuron.ai, FreeCo, Altis Vortex, PrepOnline, and their most recent acquisition Xylem Learning for ₹5 billion in June 2023.
PhysicsWallah’s revenue grew by 3.3 times to Rs 779 crore in FY23 from Rs 232.47 crore in FY22, while its profit declined by 90% to Rs 8.87 crore in FY23 from Rs 97.8 crore in FY22. Its expenses went up by 7.54 times to Rs 777 crore in FY23 from Rs 103 crore in FY22. As for FY24, the company has yet to disclose its financial report.
The company laid off 120-150 employees in November 2023 to cut down the costs. This funding for the Noida-headquartered platform comes amidst a dry spell of investments for the ed-tech sector as they cumulatively managed to raise merely $138 million through 21 deals in the initial two quarters of 2024, indicating a consistent YoY decline from $456 million in 2023, $2.3 billion in 2022, and $5.8 billion in 2021.
Amidst such challenges in the ed-tech startup ecosystem, this funding for PhysicsWallah represents the conviction that the investors hold in the platform’s long-term performance. The prominent ed-tech unicorn holds an advantage to consolidate its strong position further with the awaited funding, and mitigated competition.
