The edtech platform will invest $5 Mn in phase-1 to set up infrastructure for its school-integrated course
Another $5 Mn will be deployed towards creating content, development of pedagogy and academic upgradation of schools
The Vidyapeeth model essentially combines coaching for CBSE exams with other competitive tests such as NEET and JEE in regular classroom instructions
PhysicsWallah (PW) Vice President Imran Rashid told news agency PTI that the edtech player will invest $5 Mn in the first phase to set up infrastructure for its school-integrated course. Afterwards, the remaining $5 Mn will be deployed towards creating content, development of pedagogy and academic upgradation of schools.
As per the startup, it will invest INR 8-10 Lakh to set up related infrastructure in each such school. With this capital infusion, PW aims to expand the reach of its Vidyapeeth programme to 300 schools in Tier-III and Tier-IV cities and towns by 2025-26.
The move is part of PW’s renewed focus on its offline vertical and to tap into the burgeoning physical tuition centre model. Under the Vidyapeeth model, PW also ties up with existing schools and combines coaching for CBSE exams with other competitive tests such as NEET and JEE in the form of regular classroom instructions.
Founded in 2020 by Alakh Pandey and Prateek Maheshwari, PW largely caters to students preparing for engineering and medical entrance exams, deploying technology to bring the edtech model to the students.
The startup forayed into the offline space last year with the launch of Vidyapeeth Schools and has since then scaled the offering to 39 schools across 34 districts in 10 states, including Uttar Pradesh, Maharashtra, Uttarakhand, Bihar, and Assam.
After raising a mega $100 Mn funding round last year, the startup appears to be looking for a fresh cash infusion and is said to be in talks to raise at least $250 Mn at a valuation of $3.3 Bn, nearly 3X from its previous reported valuation of $1.1 Bn last year.
The reports of capital infusion come at a time when the edtech platform has been dogged by a slew of concerns ranging from attrition of star teachers to a dented reputation in the aftermath of a public fracas involving the edtech major and some teachers. Complicating matters has been the intense competition that PW faces from incumbents such as BYJU’S and Unacademy in both online and offline space.
Industry players recently also told Inc42 that the edtech platform has seen a spree of students opting for refunds after the platform’s initial success. The startup also appears to have changed its core focus from just JEE and NEET to other courses such as UPSC, MBA and GATE test preparations.
It has been further held back by mounting expenses, which grew six-fold between FY21 and FY22 driven largely by employee benefits, legal charges and a marketing blitzkrieg it undertook since raising the fundraise. Besides, it has also undertaken a slew of acquisitions even as the overall online edtech model appears to be on shaky ground.
After a pandemic-fueled boom of 2021, the edtech mania came down with a crash as funding nearly halved to $2.4 Bn in 2022 with big names such as BYJU’S accounting for a major chunk of these numbers. The saga has continued into 2023 as well as edtech funding tanked 93% YoY to $100 Mn in the first three months of the current year.
The ongoing funding winter has seen many edtech startups take cost-cutting measures such as layoffs, shelving expansion plans and pivoting to the offline model to cut down on the expenses and leverage the phygital model. In total, edtech startups have laid off over 7,000 employees since 2022. As many as eight edtech startups also shut shop amid volatile market conditions that dented the ecosystem.
To make matters worse, big names in the edtech space continue to grapple with mounting losses, with no clear path to profitability. However, PW is one of the few players in the edtech industry that is still in the green and has reported two back to back profitable fiscal years in FY21 and FY22.