Edtech unicorn PhysicsWallah raised $210 million in Series B funding from new investors, including India-focussed hedge fund Hornbill Capital and venture capital firm Lightspeed Venture Partners. Existing investors GSV Ventures and WestBridge were also involved.
With the offline expansion and listing plans in the pipeline, the new funding round takes the valuation of the edtech major to $2.8 billion, i.e., 2.5 times what it was worth two years ago.
The proceeds will expand its offline presence, diversify into new regions, and potentially look at acquisitions, Prateek Maheshwari, co-founder of PhysicsWallah, told businessline.
“We are sufficiently capitalised from our house cash generation. The proceeds will drive expansion and innovation within the company. We want to have the treasury for any inorganic growth opportunity that comes our way,” said Maheshwari.
The edtech giant has been entering new verticals and investing in inorganic growth opportunities. The fresh investment is expected to fuel the company’s growth momentum.
Physics Wallah has so far spent about ₹400 crore on its offline and hybrid centres Vidyapeeth and Pathshala.
“It is likely that we will invest another ₹70 to 100 crore in capital expenditure in the upcoming year,” Maheshwari said.
The company plans to open 50 centres next year and enter cities including Nashik, Pune, Dehradun, Coimbatore, Hyderabad and Chennai.
Offline expansion will be a key theme for the company as it looks to expand its reach in various other test prep and coaching sectors.
“We are doing as many as 34 test prep and the horizontal expansion into UPSC, CA is starting to show growth,” he said.
Business growth
For PhysicsWallah, 55 per cent of its business comes from its online business, while the rest is through offline centres. In FY23, its operating revenue tripled to ₹772 crore on a standalone basis, mainly driven by expansion in the offline space. The company is yet to be filed with the RoC.
Maheshwari said that the business grew 2.5 times in FY24 compared to FY23. “The revenue is 2.5 times more as compared last year, but this year is a year of sustainability,” he added. It expects its fiscal year ending March 2025 to be its most profitable yet in EBITDA terms.
Elaborating on the listing plans he said, “We will brainstorm with our partners about it. The public markets are exciting and the window of opportunity is going to be there for the next couple of years.”
The funding comes at a time when India’s edtech industry is facing significant headwinds. Byju’s, which was once valued at $22 billion, has seen a dramatic downturn as the now faces the prospect of bankruptcy proceedings.
“We believe that education is a responsibility and our students are our priority and we take this with the uttermost and sincerity and responsibility,” he said.
Founded by Alakh Pandey and Maheshwari, Physics Wallah became a unicorn in 2022 after securing $100 million in its first funding round from Westbridge and GSV. So far, the company has acquired six startups including FreeCo, iNeuron, Only IAS and Utkarsh Classes.