PhysicsWallah Bucks Funding Winter Trend with Potential $150 Million Round

Despite a chilly funding climate in the edtech sector, PhysicsWallah (PW) appears poised to secure a significant new round of funding. The fresh capital injection will be spearheaded by new investors, while existing backers Westbridge and GSV Ventures are also expected to participate, according to three sources familiar with the discussions.

Details Emerge

“PhysicsWallah is on track to raise $150 million from a combination of new and existing investors,” revealed one of the sources, requesting anonymity. “The deal’s terms have been finalized, and a public announcement is likely forthcoming.”

Valuation Soars

This upcoming round marks the second financing milestone for Alakh Pandey-led PhysicsWallah within the past two years. In June 2022, the company secured $100 million in a Series A round co-led by Westbridge and GSV Ventures.

Significantly, the new funding round is expected to value PhysicsWallah at around $2.8 billion. This represents a more than 2.5-fold increase compared to the company’s $1.1 billion valuation during its Series A funding.

Reaching Out for Comment

Entrackr contacted both PhysicsWallah and Westbridge for comment, but no immediate response was received. This article will be updated with their statements if provided.

Investor Composition and Growth Strategy

Based on data from startup intelligence platform TheKredible, Westbridge held a 2.4% stake in PhysicsWallah after the Series A round, while GSV owned 1.44%. Alakh Pandey and Prayeek Maheshwari, the company’s co-founders, collectively hold a commanding 86.54% ownership stake.

PhysicsWallah has evolved from its initial focus on online coaching for IIT/JEE entrance exams into a comprehensive education provider. The company now offers offline coaching programs, schools, colleges, and upskilling initiatives. Sources indicate that roughly 30% of its revenue stems from JEE and NEET coaching, while offline coaching through Vidyapeeth and Pathshala contributes 35% of its total collections.

Financial Performance

While PhysicsWallah has yet to release its FY24 figures, the company’s revenue reportedly surged by 3.3 times to Rs 779 crore in FY23. However, its profits saw a more than 90% decline, dropping to Rs 8.87 crore in FY23.

It’s worth noting that PhysicsWallah implemented a cost-cutting measure in November 2023, laying off 120-150 employees. Entrackr was the first to report this development.

Edtech Funding Landscape

According to data compiled by TheKredible, edtech startups collectively raised only $138 million across 21 deals during the first half of 2024. This represents a significant decline compared to $456 million in 2023, $2.3 billion in 2022, and a staggering $5.8 billion in 2021.

Significance of the Funding

This news of potential funding serves as a strong indicator of investor confidence in PhysicsWallah’s long-term potential. The company appears to have established a level of loyalty and credibility with students that other edtech companies have struggled to achieve.

Strategic Advantage

 The high valuation also suggests that investors are willing to grant PhysicsWallah extended runway to fulfill its ambitions. Securing funding in this challenging environment not only buys the company time but also provides the resources to scale up at a potentially lower cost due to a weakened competitive landscape.