PhysicsWallah looks to raise $250 million at a valuation of $3.3 billion

PhysicsWallah, a unicorn in the edtech space, is allegedly in discussions to raise at least $250 million at a valuation of $3.3 billion, which is three times more than its previous unicorn valuation of $1.1 billion.

The Alakh Pandey-led edtech powerhouse is seeking finance at a time when the edtech sector is having trouble with the financial winter and a drop in growth as a result of the reopening of schools, colleges, and coaching centers after the pandemic.

For the investment round, the edtech unicorn is in discussions with a number of private equity (PE) investors, according to sources cited by Moneycontrol. According to the article, current shareholders GSV Ventures and WestBridge Capital will also boost their individual shares in the transaction.

The round size, according to one of the sources, might change, though, as the negotiations are still in their infancy. Also, the source stated that PhysicsWallah would like to raise at least $250 million in the round.

The source added that PhysicsWallah, which last year became India’s 101st unicorn, does not require cash specifically but is seeking to boost its value and acquire funds for prospective mergers and acquisitions.

The $100 million unicorn round that Alakh Pandey-led edtech obtained last year is the only institutional funding the company has received to date. Pandey and Prateek Maheshwari founded the business in 2020, and recently it has been on an acquisition binge.

It stated earlier this week that it had paid an unknown sum to acquire the UAE-based K–12 online learning platform Knowledge Planet. For an unknown fee, it acquired a nearly 19.5% share in the online learning platform iNeuron in late 2022.

In order to grow operations and offerings together, the edtech unicorn and Utkarsh Courses entered into a long-term joint venture.

In addition, PhysicsWallah purchased the edtech companies PrepOnline, Altis Vortex, and FreeCo in October and August of 2022, respectively, months after reaching unicorn valuation.

The startup’s net profit increased 14X year over year (YoY) to INR 97.8 Cr in FY22, while operational revenue increased 9.4X YoY to INR 232.5 Cr. The business expects to generate over INR 1,200 crore in sales in FY23, with an EBITDA margin of 40–45%, according to Pandey, who previously spoke with the media.

In a period of layoffs and shutdowns in the Indian edtech industry, PhysicsWallah’s expansion ambitions are timely. The worst-affected startup industry in India, according to Inc42’s “Indian Startup Layoff Tracker,” has been edtech.

In order to reduce expenses and increase their runway in the midst of a protracted fundraising winter, 19 edtech businesses, including BYJU’s, Unacademy, and Vedantu, have let off more than 8,460 workers since the year 2022 began.

In addition, at least five edtech businesses have stopped operations since last year: Udayy, Super Learn, Crejo.Fun, Lido Learning, and Qin1.