Anyone familiar with the once-booming (and now reorienting) edtech startups in India is bound to recognise Physics Wallah, aka PW. The young edtech unicorn stands tall among industry giants, many of whom are almost double its valuation and raised billions of dollars by VCs before a funding winter gripped the market.
In essence, aggressive selling and high-octane promises failed to build sustainable businesses during the funding dip, and massive layoffs put a question mark on an industry’s potential, estimated to grow about 3x – from $4.6 Bn in 2022 to $13 Bn by 2026
But the shakeout had another side. As the market shrank and edtech startups exited en masse, a few still managed to grab bigger market shares and turned a profit. For instance, Physics Wallah emerged profitable back-to-back profitable years in FY21 and FY22, a unique feat when the edtech industry was in a quagmire.
Much of the credit goes to its founder, Alakh Pandey. It was a captivating rags-to-riches story, that of a disgruntled engineering dropout turning into a home tutor whose engaging teaching style resonated with students. He started a YouTube channel in 2016 and eventually raised $100 Mn in a Series A round in 2022, alongside Prateek Maheshwari who joined PW as its cofounder in 2020.
In brief, Pandey’s journey could be an inspiring tale for Indian wannapreneurs even now.
But the critical question is: Will the edtech major’s ambitious venture beyond its core specialities – medical and engineering test preparations (NEET and IIT-JEE) – eat into its business success and threaten its sustainability? Or will it be able to navigate every sub-sector and build an iconic edtech empire?
Critics are already accusing Physics Wallah of spreading itself too thin across a myriad of test prep segments. Others cite the destabilisation (both financial and operational) brought by hypergrowth. However, Maheshwari, an IIT-BHU alumnus, insists that the country’s 101st unicorn has seen significant growth online and offline, and its focus on providing affordable education to students has consistently defied sceptics.
The startup claimed a 2.5-fold rise in online student headcount, from 9 Lakh in FY22 to 2.35 Mn in FY23, while its offline student count saw a 5.5-fold surge to 60K enrolments in FY23.
It currently covers 28 exam categories, including IIT-JEE & NEET; the UPSC, SSC and State Public Service Commissions; the Common Admission Test, or CAT, for postgraduate management studies; NDA and CDS admissions for defence recruitment and other government exams such as banking, railways recruitment and more. Besides, PW has diversified into the K-12 segment and technology-focussed upskilling programmes on data sciences, full stack development and generative AI to cement its position as a top edtech player beyond test prep.
Asked about its success rates, Maheshwari rattled off the numbers. “This year (the 2022-23 academic year), PW recorded 20K selections for NEET; more than 3.5K qualified for JEE (Advanced); 180 were selected for the UPSC (including AIR 1) and 70 were chosen for the NDA,” he said.
These numbers are not the outcome of standalone efforts. The high score came through aggressive expansion, both offline and online, allowing it to reach nearly 98% of all pin codes in India. It has acquired 11 companies, including Knowledge Planet, a K-12 learning platform, Utkarsh Classes and Only IAS, offline test-prep centres for the UPSC and skilling platform iNeuron, among others.
Backed by WestBridge Capital, GSV Ventures and others, the edtech platform claims to have registered 798 Cr in FY23, a 3.4x increase from the previous financial year. Further, it said that its revenue from operations reached INR........