India’s Physics Wallah Raises $210M Despite Edtech Funding Drought

Physics Wallah’s recent $210 million funding round signifies a major milestone in the Indian edtech landscape, underscoring the startup’s impressive growth and resilience, especially amid the challenges that have rocked the broader industry. The Series B round, led by Hornbill Capital, a venture between China’s Orchid Asia and India’s Hornbill, along with significant participation from Lightspeed Ventures, WestBridge, and GSV, more than doubled the company’s valuation to $2.8 billion from its previous $1.1 billion in June 2022. This fresh capital brings the total funds raised by the startup to over $310 million, marking the largest edtech funding in India since 2022.

In a time when many edtech startups are grappling with funding constraints and operational downsizing—exemplified by the dramatic collapse of Byju’s, once valued at $22 billion—Physics Wallah’s success stands out. While competitors like Unacademy have cut thousands of jobs, Physics Wallah has navigated these turbulent waters by staying true to its core mission: offering affordable, high-quality education to students across India, including those from underprivileged backgrounds.

Physics Wallah’s journey began in 2016 as a humble YouTube channel where co-founder and educator Alakh Pandey offered free video lectures to help students, particularly those who could not afford premium coaching classes. His deep personal connection to the cause—stemming from his own experience of lacking access to quality education—resonated with millions of students across the country. By 2020, the platform had evolved into a full-fledged company, becoming the largest Indian education community on YouTube, and expanding its services to reach a much broader audience.

Today, Physics Wallah serves 46 million students across five vernacular languages, catering to a wide range of learners, from third graders to those preparing for competitive exams like JEE, NEET, and UPSC. One of the startup’s key differentiators is the affordability of its courses, with annual packages starting as low as $50, making education accessible to students from all walks of life. With over 5.5 million paying subscribers, Physics Wallah has firmly established itself as the go-to platform for exam preparation in India. “We are No. 1 in terms of revenue and the size of the student base for major exams like JEE, NEET, GATE, and UPSC,” said Prateek Maheshwari, co-founder of Physics Wallah.

Beyond affordability, the company’s use of technology, especially AI, has been a game-changer in enhancing students' learning experiences. Physics Wallah employs AI to power its AI Guru app, which assists students in solving complex problems, and integrates AI-driven teaching assistants to address student queries in real time. This blend of live online classes, AI-powered solutions, and offline learning through its 180 brick-and-mortar centers offers a unique hybrid model that appeals to a diverse range of students, further cementing its position in the market.

Physics Wallah’s financial success reflects its strong market position. The company reported a revenue of $96.2 million for the fiscal year ending March 2023, and Maheshwari expects the coming fiscal year to be its most profitable yet in terms of EBITDA. This growth is particularly impressive in a sector that has seen a sharp decline in demand for online learning post-pandemic, as schools have reopened and many edtech startups have struggled to maintain user engagement.

While Physics Wallah has benefited from the long-term demand for affordable, quality education in India, its success is also due to its ability to adapt to changing market conditions. Unlike many of its competitors, which focused heavily on scaling during the pandemic, Physics Wallah has maintained a balanced approach, combining organic growth with targeted acquisitions. The company has acquired about 10 firms over the past three years and plans to use the new funding to explore more inorganic growth opportunities, though Maheshwari emphasized that there are no immediate plans for an IPO.

The new funding will also enable Physics Wallah to enhance its AI capabilities, expand its offerings, and further strengthen its infrastructure to reach even more students. With its continued focus on delivering affordable, high-quality education and leveraging cutting-edge technology, Physics Wallah is well-positioned to solidify its leadership in the Indian edtech space and beyond.

In light of the broader challenges facing the edtech sector in India, Physics Wallah’s ability to raise substantial funding and grow its user base is particularly notable. The collapse of Byju’s, which is now facing bankruptcy proceedings, and Unacademy’s repeated layoffs have cast a shadow over the industry. However, Physics Wallah’s differentiated approach, focusing on hybrid learning models, affordability, and AI-driven solutions, has allowed it to thrive where others have faltered.

According to Lightspeed’s Dev Khare, Physics Wallah’s growth is driven by several converging trends, including its focus on making education more accessible by lowering the price point, much like other successful startups in Lightspeed’s portfolio, such as budget-hotel chain Oyo and quick-commerce platform Zepto. As Maheshwari points out, the market for education in India remains robust, with students still seeking a hybrid learning experience that combines the best of both online and offline worlds. “From a student’s perspective, not much has changed post-COVID. The market is entirely hybrid, and students are enjoying the best of both worlds to strengthen their preparation,” Maheshwari noted.

Manoj Thakur, founder of Hornbill Capital, praised Physics Wallah for its innovative 3C model—Content, Community, and Commerce—which he believes has set the startup apart from its peers. “We are excited to see PW’s use of AI not only to help improve students’ outcomes but also their emotional well-being,” Thakur said, highlighting the company’s holistic approach to education. As Physics Wallah continues to expand its offerings and explore new growth opportunities, it is poised to lead the next wave of innovation in the global edtech market, proving that quality education can be both accessible and affordable, even in challenging times.