SUMMARY
- PW raised $210 mn in Series B funding, led by Hornbill Capital, valuing the company at $2.8 bn.
- Funds will support strategic initiatives, including geographical expansion and targeted acquisitions.
- PW’s revenue surged 234% YoY in FY23, and it aims to be PAT-positive in FY25.
In its Series B investment round, managed by Hornbill Capital, Ed-tech unicorn Physics Wallah (PW) raised $210 million (about Rs 1,756.7 Cr) at a post-money valuation of $2.8 billion. Along with its current investors GSV Ventures and WestBridge, Lightspeed Venture Partners (LSVP) also participated in the round.
PW co-founder Prateek Maheshwari stated that the startup plans to primarily allocate the funds towards strategic initiatives, including geographical expansion and targeted acquisitions, as reported by Inc42.
Maheshwari stated, “Currently, we are sitting on Rs 1,200 Crore plus treasury. For our internal growth initiatives be it Vidyapeeth expansion, new category launches, new vertical business, and innovation which we are doing, we are sufficiently capitalized. But now we have a total group size of 15,000 employees and we thought of raising one round so that the treasury gives us more comfort. It’s a comfort capital which we have raised.” He further said that although the startup does not currently have a shortlist of assets for purchase, it does have a thesis in place that includes businesses in content-heavy industries like publishing. Furthermore, Maheshwari said, “In general, we do not have a huge strength in the southern part. Xylem has done a phenomenal job in Kerala and they are planning to expand it to Tamil Nadu also. But Andhra Pradesh, Telangana, and Bengaluru are the markets where we are not as strong in terms of online as well as offline presence.”
Manoj Thakur, founder of Hornbill Capital stated, “Physics Wallah is a rare combination of vision, execution, and impact with a thriving 3C model – content, community, and commerce. We are excited to see PW’s use of AI not only to help improve students’ outcomes but also their emotional well-being.”
The 2020 founded Physics Wallah, led by Alakh Pandey and Prateek Maheshwari joined the unicorn club in the year 2022 after raising $100 million from Westbridge and GSV Ventures in its initial fundraising round, valued at $1.1 billion. PW presently runs tech-enabled offline and hybrid centers in 105 different cities throughout the nation. Its services cover a wide range of educational sectors, such as two Gurukulam Schools, forty-three categories of test preparation, a skill development vertical, and verticals for further education and studying overseas. Additionally, it states that over 4.6 Crore kids can receive free education through its 112 YouTube channels in five regional tongues.
Since 2022, the firm has acquired other businesses and entered the offline market to broaden its products. The ed-tech has acquired three more companies in 2023 alone including the test-prep portal Utkarsh Classes, the UAE-based K–12 online learning platform Knowledge Planet, and iNeuron, which provides courses in AI and ML for skill development.
PW reported net profitability in FY23, outperforming competitors like Unacademy and Vedantu, despite the sector’s profitability challenges. Its net profit, however, dropped by over 90% YoY to Rs 8.9 crore. Simultaneously, the company’s operating revenue surged by 234% YoY to Rs 779.3 crore. For FY24, PW’s revenue nearly tripled to Rs 1,975 crore, and it projects a 50% increase in FY25. However, PW slipped into losses at the group level in FY24, though it expects to be PAT-positive by FY25. According to founder Alakh Pandey, the company was profitable in Q1 FY25 and anticipates recording its highest EBITDA for the fiscal year.
