Edtech Startup PhysicsWallah Turns Unicorn Amid Layoffs and Cutbacks in the Sector
The startup has raised $100 million in Series A funding from Westbridge and GSV Ventures
Edtech platform PW (PhysicsWallah) has raised $100 million in Series A funding from Westbridge and GSV Ventures. This comes at a time when prominent players in India's edtech sector such as Unacademy, Lido and Vedantu have resorted to layoffs and cutbacks to keep their businesses afloat.
Experts feel that there is also an inherent flaw in the business models of most startups in the space. In a recent interview with Entrepreneur India, Aniruddha Malpani, an angel investor, said, "The sales team is the one that gets laid off, which shows how these companies are only interested in sales. They set unrealistic targets for the sales employees, for whom this is usually the first job. They get lured into the job as they are promised a fat salary. And when they can't keep the targets they are fired."
PhysicsWallah's entry into the unicorn club as India's 101st unicorn amid recession fears and layoffs in the sector brings to the fore the importance of cracking the right unit economics. "The Indian edtech ecosystem has grown considerably over the last two years; however, recent developments have demonstrated the first-hand importance of an efficient edtech Infrastructure. PW creates long-tail value for learners by delivering high-quality education at a democratic price. PW is one of the rare startups with a profound understanding of the education that BHARAT today needs. The founder's focus on learning outcomes of students excites us and we look forward to a long partnership with them," said Sandeep Singhal, managing director, WestBridge Capital.
This transaction values the company at $1.1 billion post-completions. PW will utilize these funds for business expansion, branding, opening more PW learning centers, and introducing more course offerings.
The startup was founded by Alakh Pandey and PrateekMaheshwari in 2020 and has 5.2 million Play Store downloads with a 4.7 rating and 6.9 million subscribers on YouTube. "We are delighted to join the unicorn bandwagon with this latest funding. Since its inception, we have focused on delivering high-quality education with affordability at the forefront, ensuring that learners from all walks of life can continue their higher education and boost their career trajectory without any hassles. This latest development will help us further our vision and implement new initiatives to augment the learning journeys of students, thereby enabling them to reach new heights in their careers. Our commitment remains 'every dollar spent in PW is for the greater good of learners," said Alakh Pandey, founder, and CEO, PW.
The firm currently has 1900 employees, including 500 teachers and 90-100 tech experts. It also has 200 associate professors available to answer student queries and another 200 professionals to create exam questions and term papers.
"While many pundits say that the bloom is off the rose for Indian edtech, we at GSV Ventures believe the flowers are just beginning to bloom as extraordinary entrepreneurs are democratizing learning and skills delivery for the 90 per cent of India still untouched by the edtech revolution. One such company is PW (PhysicsWallah), which we are proud to be co-leading its first round of investment with WestBridge. Led by renowned YouTube STEM educator, Alakh Pandey and tech executive PrateekMaheshwari, the company is disrupting the test preparation market (today JEE and NEET) delivering low-cost solutions of the highest quality with extraordinary learning outcomes for over 6mm students and growing. GSV Ventures' mission is for ALL people to have equal access to the future and PW is delivering on that mission AT SCALE," said Deborah Quazzo, managing partner, GSV Ventures.
The company has been profitable since inits ception with positive cash flows and reserves. The startup claims that its revenue grew 9-fold in the year 2021-2022 vis-a-vis 2020-2021. Its current run rate for FY 2023 is at $65 Million.
Further, the startup is gearing up to launch educational content in 9 vernacular languages, including Bengali, Marathi, Tamil, Telugu, Gujarati, Odia, Malayalam, and Kannada. The core idea behind this step is to reach every corner of the country and connect with 250 million+ students by 2025. The firm looks to bridge the accessibility gap by opening 20 offline coaching classrooms, aka Pathshala, across India. PW has established more than 20 centres across 18 cities with more than 10,000 students enrolled for 2022-2023 session.