Alak Pandey (right), CEO of PhysicsWala, with co-founder Prateek Maheshwari (left).
Physics and God
Indian education technology startup Physixwalla said Friday it has raised $210 million as it seeks to expand its business, partly through acquisitions, amid woes in the sector.
The company is valued at $2.8 billion, a significant increase from its last valuation of $1.1 billion, thanks to the funding led by Hornbill Capital, which includes Lightspeed Venture Partners, GSV, and WestBridge.
Founded in 2020, Physics Wallah is one of the edtech companies in India that offers free and paid courses for various competitive exams in India. The company aims to stand out by offering courses that cost an average of less than $50, making them accessible to more children in the poorest areas of the country.
“We are not designed for 1% of the country or 1% of the world, we are designed for the remaining 99%, those who cannot afford to go to fancy training classes… Now we are enabling different types of students,” PhysicsWala CEO Alak Pandey told CNBC.
The company operates on a freemium business model, hosting free courses on YouTube. For students who want more features like homework and quizzes, there is a paid offering.
The company said its revenue grew 250% year-on-year in the fiscal year ending March 2024, and Pandey said he expects an “absolute high” for earnings before interest, taxes, depreciation and amortization in the current fiscal year. Earnings before interest, taxes, depreciation and amortization, or EBITDA, is one of the profitability measures used by companies.
Bandy said the company is open to acquisitions as long as they give it access to new content and users.
“We are open to the idea of unification if it is based on a different geography that we cannot serve, and if it serves the content and the community first,” Pandey said.
The CEO pointed to equity investments the company has already made. Last year, Physics Wallah acquired a 50% stake in Xylem Learning, an education technology company headquartered in the southern Indian state of Kerala.
Educational Technology Issues in India
Pandey and his co-founder Pratik Maheshwari said the company is focusing on some key trends including the push towards hybrid education — both online and in physical classrooms — and expanding internet penetration across villages, towns and smaller cities in India. All of this helps children from less privileged backgrounds access education.
The edtech boom in India began during the Covid pandemic when many companies sought to expand significantly.
But this expansion has also led to some high-profile collapses in the sector, including education technology company Byju’s — once valued at $22 billion — which has nearly collapsed and is facing multiple bankruptcy proceedings in India. Its downfall has been attributed to factors including aggressive acquisitions, high marketing spend and poor management.
Speaking about some of the failures in the edtech sector in India, Pandey said his company is focused on the content it delivers and the outcomes for students.
“If you watch interviews or even read the headlines of former actors that you talk about, all they talk about is the crazy ratings they got, the money they made, the amount of money they made,” Bandy told CNBC.
“Education is different. It’s not like any other startup where you can grow and talk about crazy valuations… Deep down you have to accept that you’re actually changing students’ lives.”
Maheshwari, who also spoke to CNBC, said that despite the setbacks, the market is still growing.
“I don’t think the market has shrunk. A number of players have struggled to perform post-Covid… but the number of learners is increasing year on year,” Maheshwari said.
Speaking about the future of Physix Walla, Pandey said that the IPO will happen, but did not specify a timeline for it.
“The IPO is something we will do,” Pandey said. “We want to have strong corporate governance, we are working on that, forming a board of independent directors… It doesn’t matter to us when the IPO will happen, we are running the company like a public company.”
