Exclusive: PhysicsWallah set to raise $150 Mn at $2.8 Bn valuation

While the edtech space has been going through a long spell of the so-called ‘funding winter’, PhysicsWallah (PW) appears close to raising a new large round. Fresh funding will be led by new investors whereas existing investors including Westbridge and GSV Ventures will also participate, three sources aware of the discussion told Entrackr.

“PhysicsWallah is set to raise $150 million from new and existing backers,” said one of the sources requesting anonymity. “The terms of the deal have been sealed and the transaction is likely to be public soon.”

This will be the second financing round for the Alakh Pandey-led firm in the past two years. PhysicWallah raised $100 million in a Series A round led by Westbridge and GSV Ventures in June 2022. 

“PhysicsWallah will be valued at around $2.8 billion in the new round,” said another source who also wished not to be named.

This will be over a 2.5X jump in the company’s valuation as PhysicsWallah was valued at $1.1 billion in its Series A funding.

Queries sent to PhysicsWallah and Westbridge didn’t elicit any immediate response. We will carry their comments in case they respond.

According to the startup data intelligence platform TheKredible, WestBridge held a 2.4% stake in PhysicWallah while GSV owned 1.44% as of the Series A round. Its co-founders Alakh Pandey and Prateek Maheshwari cumulatively command 86.54% of the company.

PhysicsWallah started with online coaching for IIT/JEE but has now become a full-fledged education firm, offering offline coaching, schools, colleges, and upskilling programmes. According to sources, about 30% of its revenue comes from JEE and NEET coaching whereas offline coaching (via Vidyapeeth and Pathshala) contributes 35% of the collection. 

While the company is yet to disclose FY24 numbers, PhysicsWallah’s revenue surged 3.3X to Rs 779 crore in FY23. At the same time, the firm’s profit declined more than 90% to Rs 8.87 crore in FY23.

In November last year, the company laid off 120-150 employees as a cost-cutting measure. Entrckr was the first to report the development.

As per data compiled by TheKredible, edtech startups raised only $138 million across 21 deals during the first half of 2024. This is a sharp fall from $456 million in 2023, $2.3 billion in 2022, and $5.8 billion in 2021.

The funding news is the strongest testament yet to the investor conviction in PhysicsWallah’s long-term strengths. This incredible loyalty and credibility with the student community other edtechs have simply not been able to earn for love or money. 

The valuation also indicates a relatively long time investors are willing to wait it out for the firm to deliver on its potential and declared ambitions. A funding round in this environment will not just buy PhysicsWallah time, but also provide the gunpowder to scale up at a much lower cost thanks to the emasculated state of the competition.