Physics Wallah’s FY23 Revenue Rises 3.3X YoY To INR 772 Cr, Expenses Zoom 7.5X

Edtech major Physics Wallah (PW) on Friday (December 19) said its revenue from operations jumped 3.3X year-on-year (YoY) to INR 771.76 Cr in the financial year 2022-23 (FY23). 

The startup had clocked an operating revenue of INR 232.47 Cr in FY22 and INR 24.6 Cr in FY21. 

The edtech unicorn released select numbers ahead of filing audited financial statements with the Registrar of Companies (RoC). While it clocked a net profit of INR 97.8 Cr in FY22, it didn’t disclose its bottom line number for FY23. 

In a statement, the startup claimed its adjusted EBITDA (before ESOP costs, LER and a one-time inventory provisioning) stood at INR 127 Cr in the year ended March 2023, a decline from INR 134 Cr in FY22. 

Founded in 2020 by Alakh Pandey and Prateek Maheshwari, PW initially started as a YouTube channel but has since expanded to a full-fledged test prep platform for competitive exams. At the outset, it catered to the IIT/JEE and NEET aspirants but has lately forayed into various segments such as post-graduate programmes, UPSC prep, and upskilling courses. 

Earlier this year, the edtech unicorn said it would invest INR 100 Cr in scaling up its UPSC vertical and would pump an additional INR 120 Cr to shore up its skill development vertical.

PW last raised $100 Mn as part of a funding round from Westbridge and GSV Ventures in 2022 at a post-money valuation of $1.1 Bn, turning into a unicorn. The financial results come at a time when the edtech juggernaut is reportedly in talks to raise $250 Mn at a valuation of $3.3 Bn. 

PW currently operates a chain of 58 Vidyapeeth (offline) and Pathshala (hybrid) centres, and aims to increase the number of these centres to over 120 in 2024. PW claimed it enrolled 1.4 Lakh students for such offline and hybrid courses in the academic year 2023-24.

Overall, PW said that it ‘taught’ 23.5 Lakh students across all exam categories (barring acquisitions) in FY23, up from 9 Lakhs in the previous fiscal. 

“Our growth was significant both in the online and offline space. Our online categories grew to 2.5X in terms of students headcount from 9 Lakh in FY22 to 23.5 Lakh in FY23 while our offline student headcount grew to 5.5X touching 60,000 enrolments in FY23… We are in no hurry to compromise growth for achieving a steady-state margin profile,” said cofounder Maheshwari.

Where Did PW Spend?

As PW undertook a full-fledged offline expansion, its expenses soared 7.54X to INR 777 Cr in FY23 from INR 103 Cr in the year-ago period. 

Employee costs grew 863% to INR 406 Cr in the year ended March 2023 from INR 42 Cr in FY22. ‘Other costs’ also zoomed 475% to INR 204 Cr in FY23 from INR 42.9 Cr in FY22. 

The offline expansion led to rent expenses ballooning to INR 56 Cr during the period under review from INR 3.4 Cr in FY22. On similar lines, the startup’s marketing expenses also rose six-fold to INR 66.7 Cr in the year ended March 2023 compared to INR 11 Cr in FY22. 

However, the unicorn’s cash reserves surged 6.23X to INR 745.9 Cr at the end of FY23 from INR 119.7 Cr a year ago. 

The startup said it acquired as many as eight entities in 2022 and 2023 and expects an inorganic revenue of INR 500 Cr to kick in the financial statement of FY24 on account of these acquisitions. The latest in the spree of M&As was PW picking up a 50% stake in Xylem Learning to foray into South India.

Notwithstanding the acquisitions and offline expansion, PW has also been reeling under the impact of funding winter. With funding taps running dry, it recently fired around 70-120 employees to reportedly extend its runway, conserve capital and streamline operations. However, the company attributed the layoffs to performance issues.

Meanwhile, the edtech sector has been among the worst hit by the ongoing funding winter. This has led to the funding numbers for the sector declining 88% to $283 Mn in 2023 from $2.4 Bn in 2022. 

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