From Disruptor To Just Another Edtech Unicorn: Alakh Pandey’s PhysicsWallah At A Crossroad

From Disruptor To Just Another Edtech Unicorn: Alakh Pandey’s PhysicsWallah At A Crossroad

SUMMARY

With profits in FY21 and FY22, Alakh Pandey-led PW said it would buck the cashburning approach of edtech giants, but with its product strategy in the past year, it’s now very similar to BYJU’S, Unacademy and others

The startup is now in the market for another fundraise and it's facing headwinds such as attrition of star teachers and has seen a spate of refunds from students after initial success

PhysicsWallah also runs the risk of relying too heavily on Pandey's brand power for newer courses such as K-12, UPSC or MBA test prep where he has little involvement as an educator

“Don’t fix what’s working. The competition is trying all kinds of things, but we have a method that has delivered results. The funding will not change us.”“PhysicsWallah got off to a great start in Kota. They got something like 30,000 students for its first major offline centre. But what we are seeing today in Kota is due to the failure quality of education or learning,” says the chief business officer of a rival edtech giant that’s also ramped up its offline play in the past 14-16 months.But consistency of teachers and quality of learning are paramount. “When students start to complain about low quality coaching at any institute, that institute has to spend significantly more on marketing activities and may even have to let go of some teachers, which impacts how many students it can cater to,” the CBO added.For instance, the MBA courses are priced at INR 5,999 and INR 6,999; offline UPSC courses are offered at INR 10K and these are said to be discounted prices. The IIT JEE courses still top out at INR 4,500 for students, so the startup is looking to drive margins with these new verticals.“The best practice in edtech today is to use digital marketing to acquire users for offline centres, but on-ground marketing cannot be ignored, as this is the most efficient, especially if you look at the demographic being targeted i.e the parents of students across segments,” says the cofounder of a Bengaluru-based edtech unicornHe’s easily the highest paid employee at the company, with a remuneration of INR 9.6 Cr in FY22, as per regulatory filings by PWPhysicsWallah also runs the risk of relying too heavily on Pandey’s brand power for newer courses such as K-12, UPSC or MBA test prep where he has little involvement as an educator“There’s a reason people talk about startups that raised too much too soon. Sometimes it’s good to be hungry for cash to think of innovative ways to beat large competition. And cash makes you comfortable in a bad way,” according to the founder of a Delhi NCR-based travel tech company.“Offline coaching works, and we have examples like Aakash and Allen to prove it, but that’s not why we as VCs invest in edtech, right? If startups go after an offline-first model, instead of leveraging tech they have moved away from the original promise,” Omidyar Network India partner Siddharth Nautiyal told Inc42.

That was PhysicsWallah (PW) cofounder Alakh Pandey telling us in June 2022 about why he was bullish about the future of his startup.

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