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PhysicsWallah is evaluating seven to eight entities in the UPSC preparation space to strike a buyout deal
Last week, media reports said that the edtech unicorn is in talks to acquire Drishti IAS, but the latter's CEO Vivek Tiwary termed the development as rumours
The IPO-bound startup had raised $210 Mn last year with an aim to expand geographically and make strategic acquisitions
Edtech unicorn PhysicsWallah
is reportedly looking for acquisitions in the Union Public Service Commission (UPSC) test preparation space, amping up its efforts to bolster presence in the segment.
An ET report said that the IPO-bound startup is evaluating seven to eight entities in the UPSC preparation space to strike a buyout deal.
“PhysicsWallah is in the process of valuing various assets in the IAS-training space, including Chaitanya Academy, Drishti IAS and Rau’s IAS Study Circle, for a potential acquisition,” a source close to the development told ET.
Last week, Entrackr reported that PhysicsWallah was in talks to acquire Drishti IAS for INR 2,500 Cr. However, the latter’ s CEO Vivek Tiwary rubbished the report as just “rumours”.
Besides, the startup also raised a mega round of $210 Mn (around INR 1,818 Cr) last year which saw participation from Lightspeed Venture Partners and existing investors, GSV and WestBridge.
Back then, PhysicsWallah cofounder Prateek Maheshwari told Inc42 that the newly raised capital would be largely deployed for geographical expansion and key acquisition. The funding round was raised at a post-money valuation of $2.8 Bn.
PW declined to comment on Inc42’s queries pertaining to the development.
PhysicsWallah started as a YouTube channel in 2016 by Alakh Pandey and later grew to become a major edtech entity in 2020 after it received its first institutional funding. Maheshwari also joined PW as cofounder in the same year.
Later, the startup started to build on its edtech empire by incorporating more offerings through major acquisitions. Till date, the startup has made 11 key acquisitions and expanded its presence in the online and offline courses for IIT-JEE, NEET, SSC and UPSC preparation space.
In 2023, it struck a joint venture deal with Jodhpur-based Utkarsh Classes which offers preparation courses in state and central government examinations. Besides, the startup also said that it aims to invest INR 100 Cr to further scale up its UPSC vertical.
According to research, the test preparation market in India is set to become a $17.20 Bn market by 2029 and with the current acquisition plans, PW will look to further strengthen its foothold in the segment.
The Alakh Pandey-led startup posted a consolidated net loss of INR 1,131.2 Cr in the financial year ending March 31, 2020 (FY24), a nearly 13.5X jump from a net loss of INR 84.06 Cr in the previous fiscal year.
The primary reason for the slipping into losses was change in fair value of CCPS and jump in ESOP and employee expenses. However, PW’s revenue from operations surged 2.6X to INR 1,940.4 Cr in the year under review from INR 744.3 Cr in FY23.
The startup filed its draft red herring prospectus (DRHP) via a confidential route and is looking to raise around $500 Mn through its public listing. It has also shortlisted Axis Capital, Kotak Mahindra Capital, Goldman Sachs, and JP Morgan as bankers for its initial public offering.
