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Exclusive: PhysicsWallah creates ESOP pool worth $93 Mn


On the lines of several growth stage companies, edtech unicorn PW (popularly known as PhysicsWallah) has created a new employee stock option pool (ESOP) for its employees. This is the maiden ESOP pool for the WestBridge and GSV-backed company.

The board at PhysicsWallah has passed a special resolution to create an ESOP pool of 6,66,66,670 stock options. Importantly, every 10 stock options will be converted into one equity share, according to its regulatory filing with the Registrar of Companies (RoC).

As per Fintrackr’s estimates, the fresh employee stock option plan for PhysicsWallah is worth around Rs 750 crore or $93 million.

Founded in 2016 by Alakh Pandey and later joined by Prateek Maheshwari, PhysicsWallah offers online and offline courses and study materials for JEE, NEET and other engineering entrance and state board exams. The platform provides live classes, video lectures, test series and dynamic exercises for the aforementioned exams.

The firm currently has 1,900 employees, including 500 teachers and 90-100 tech experts. It also has 200 associate professors available to answer student queries and another 200 professionals to create exam questions and term papers.

With a surge in its adoption, PhysicsWallah registered a nearly 10 fold spike in its revenue that stood at Rs 233 crore in FY22. Unlike most edtech unicorns, it was profitable in FY22 with a surplus cash of Rs 98.3 crore on its balance sheet.

PW entered the unicorn club in June after raising a $100 million round from Westbridge and GSV Ventures. Soon after the fundraise, it forayed into offline learning with the launch of its centre in Kota.

On the lines of its peers, the company also made three acquisitions: PrepOnline, Altis Vortex, and FreeCo in 2022.

PhysicsWallah became the second bootstrapped education company to raise a large round from institutional investors. In May, Kota-based ALLEN Career Institute scooped up a $600 million round from Bodhi Tree Systems. Entrackr was the first to report both developments.

The large stock option pool will be ammunition for the cut throat gunfight that has broken out in the edtech space, especially after the full reopening of the offline players. In a market where high quality educators were already prized, the challenge to find and retain the next generation of educators is high, and the need to compensate them more smartly.

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