In the fiscal year ending March 31, 2023, PhysicsWallah (PW), led by Alakh Pandey, experienced a significant drop in profit, plummeting over 90% compared to the previous year. Despite being the solely profitable edtech unicorn in India, PW’s net profit fell sharply from INR 98.2 Cr in FY22 to INR 8.9 Cr in FY23 due to increased expenses.
Established in 2016 by Alakh Pandey, PW initially operated as a YouTube channel offering exam preparation content. Over time, it evolved into a comprehensive edtech platform, adding various courses. PW has been rapidly expanding its operations in recent years, with Prateek Maheshwari joining as a co-founder in 2020.
In FY23, PW’s operating revenue surged by 234% to INR 779.3 Cr from INR 233 Cr in the previous fiscal year. Factoring in other income, the total revenue reached INR 804.6 Cr in FY23, marking a 243% increase from INR 234.6 Cr in FY22.
PhysicsWallah experiences a decline in profitability
Due to its expansion and acquisitions, PhysicsWallah witnessed a significant increase in total spending in FY23.
Employee Benefit Expenses: The largest portion of its expenditure went towards employee benefits, which saw a substantial rise of 878% compared to the previous fiscal year, reaching INR 413.8 Cr. The startup’s workforce has grown to over 10,000 employees, with competitive salaries offered to star teachers
Advertising Expenditure: Notably, the remuneration received by Alakh Pandey decreased by more than half to INR 4.6 Cr in FY23. Additionally, advertising expenses surged sixfold to INR 67 Cr
Rent Cost: Rent costs spiked by over 1,500% to INR 57 Cr due to its offline expansion efforts.
The edtech startup became a unicorn in 2022 after securing $100 Mn in its first funding round from Westbridge and GSV Ventures. Since then, it has continuously broadened its services by venturing into offline education and acquiring multiple startups.
Expanding beyond its initial offerings, the startup now provides post-graduate programs and the PW Skills upskilling platform. It offers both offline and hybrid coaching through its 60 Vidyapeeth centers across India. Recently, it launched PW Gurukulam School for primary classes.
In line with its growth strategy, PW has pursued various acquisitions. Last June, it acquired a 50% stake in Xylem Learning for $61 Mn.
Additionally, the startup announced investments of INR 100 Cr to strengthen its UPSC vertical and INR 120 Cr to boost PW Skills.
However, it downsized its workforce by 70-120 employees in November, citing performance-related reasons as the primary cause.
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