Alakh Pandey’s PhysicsWallah Looking To Raise $250 Mn At $3.3 Bn Valuation

SUMMARY

PhysicsWallah is talking with multiple PE investors for the funding round; existing shareholders GSV Ventures and WestBridge Capital will also increase their stakes

The Alakh Pandey-led startup, last valued at $1.1 Bn, has only raised one institutional round so far – its unicorn round of $100 Mn last year

PhysicsWallah reported a 14X YoY jump in its net profit to INR 97.8 Cr in FY22, while operating revenue grew 9.4X to INR 232.5 Cr

Edtech unicorn PhysicsWallah is reportedly in talks to raise at least $250 Mn at a valuation of $3.3 Bn, three times higher than its unicorn valuation of $1.1 Bn.

The Alakh Pandey-led edtech giant is looking to raise the funding at a time when the edtech sector is struggling amid the funding winter and decline in growth due to the reopening of schools, colleges and coaching centres after the pandemic. 

The edtech unicorn is talking with multiple private equity (PE) investors for the funding round, Moneycontrol reported citing sources. PhysicsWallah’s existing shareholders GSV Ventures and WestBridge Capital will also increase their respective stakes in the round, the report added.

However, one of the sources was cited as saying that the round size might vary as the talks are still at a fairly early stage. The person added that PhysicsWallah will look to raise at least $250 Mn in the round.

Interestingly, the source also noted that PhysicsWallah, which became India’s 101st unicorn last year, does not need funding per se but is looking to increase its valuation and secure capital for potential mergers and acquisitions.

The Alakh Pandey-led edtech unicorn has only raised one institutional round so far – its unicorn round worth $100 Mn last year. Founded in 2020 by Pandey and Prateek Maheshwari, the company has been on an acquisition spree of late.

Earlier this week, it announced the acquisition of UAE-based K-12 online learning platform Knowledge Planet for an undisclosed sum. In late 2022, it bought a nearly 19.5% stake in the online learning platform iNeuron for an undisclosed sum. 

The edtech unicorn signed a long-term joint venture with Utkarsh Classes to jointly scale operations and offerings.

PhysicsWallah also acquired edtech platforms PrepOnline and Altis Vortex in October and FreeCo in August 2022, months after hitting unicorn valuation.

The startup reported a 14X year-on-year (YoY) jump in its net profit to INR 97.8 Cr in FY22 while operating revenue surged 9.4X YoY to INR 232.5 Cr. In an earlier interview with the publication, Pandey said that the startup is expecting over INR 1,200 Cr in revenue in FY23, with an EBITDA margin of 40-45%.

PhysicsWallah’s growth plans come at a time when the Indian edtech sector has been plagued by layoffs and shutdowns. According to Inc42’s ‘Indian Startup Layoff Tracker’, edtech has been the worst-impacted startup sector in India.

Since the start of 2022, 19 edtech startups, including BYJU’S, Unacademy, and Vedantu, have fired more than 8,460 employees to cut costs and extend the runway amid a prolonged funding winter.

Besides, at least five edtech startups – Udayy, Super Learn, Crejo.Fun, Lido Learning and Qin1 – have shut operations since last year.

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