Has Physics Wallah Cracked the Code That BYJU'S Couldn't?
Indian EdTech's Reality Check
First things first - back to this space after a very long time. Got lost in the AI development phase and couldn’t keep up with the narrative of how EdTech is dead in India - and why Byju’s is a ______ Fill in the blanks of all that you have heard. Media, Social or traditional takes you both up and down. I drift, this post is not about the B word.
Back to the post and PW. Has PW (or Physics Wallah cracked the code on Indian Edtech?)
The numbers tell a brutal story. EdTech funding in India:
2022: $2.4 billion
2023: $321 million (87% drop)
First half 2024: $164 million
Second half 2023 to First half 2024: 96% jump
A strategic break here - which you are welcome to skip if you are already intrigued about the topic at hand. This is particularly relevant if you are new here (or have forgotten what this blog is about)At the intersection of Edtech B.E.T. (Business, Education, Technology)
·
Welcome to Edtech Newsletter by me, Varun Dhamija.
Back to the topic:
Test prep segment took the hardest hit:
2021: $175 million in funding
2023: Just $8.5 million
BYJU'S fall from grace has left Indian edtech in shambles. Investors who once couldn't write checks fast enough are now keeping their wallets shut. Companies have had to rethink everything. No more burning cash to grab customers. No more fancy growth metrics. Today, it's simple - show me the money, show me real learning.
But in Noida, someone's telling a different story.
Why Physics Wallah Makes Sense (Financially, at least)
Recent moves show why investors are paying attention:
September 2024: $210 million Series B round
New valuation: $2.8 billion
Now India's third-largest edtech by value
IPO plans for 2025, targeting $400-500 million raise
Already picked banks: Axis Capital, Kotak Mahindra Capital, Goldman Sachs, JP Morgan
For those of you waiting to remind me that financials mean EBITDA, Cash Flow and, not valuation. Hold my beer, until later. But do comment, please. I would love to pick this up.
Think about it - Alakh Pandey didn't start with pitch decks and VC meetings. He started teaching on YouTube. Kids actually learned something. Parents noticed. Word spread.
The money followed:
2.7 million paying students
Business doubled in 2024
Making money while others burn it
Revenue heading past ₹2,000 crore
Single event (Vishwas Diwas) brought in ₹100+ crore in 12 days
Online: 60% of revenue
Offline: 40% of revenue
Making Good Education Cheap (Actually Cheap)
Here's what clicked - Physics Wallah charged one-third of what others did. Not as a stunt, but as the whole game plan. They weren't just cheaper; they made good teaching available to families who thought quality education was out of reach.
Their test prep courses work because:
Teachers know their stuff
Material makes sense
Tests tell you where you stand
Students help each other
Prices don't give parents heart attacks
They're not losing money on this. Lower prices brought in more students, and the math worked out.
Wowed!!! Is that a word? I digress again. Byju’s started in a similar fashion.
Growing Pains?
Physics Wallah is everywhere now:
Real classrooms
School stuff
Job training
Teaching in local languages
Looking at other countries
Upskilling
Smart moves or spreading too thin? Running physical centers isn't like making videos. They're opening 60+ centers, which means:
Finding good teachers
Keeping teaching quality high
Managing buildings
Understanding local needs
The money from GSV funds does mean something after all, expansion/expansion/expansion. Hey, what about outcomes?
Real Classrooms, Real Headaches
Going offline isn't simple. Current problems:
Daily Grind:
Making sure every teacher is good
Dealing with rent and bills, duh rentals pile up
Getting online and offline to work together, what do you stand for?
Building trust in new cities. In some sense, this one’s not so tough. After all the online funnel is the (cheap/free) source for the offline funnel. Drumrolls to PW
Growth Issues:
Finding teachers in smaller cities
Making all centers look and feel the same
Helping students when they're stuck
Keeping costs low
Some people report that physical centers bring in 40% of money now, but making it work everywhere is tough. Why 40%? Remember the offline ARPU (Average revenue per user, is pretty high)
Industry Context & Competition
Current state of Indian edtech:
11,000 active companies
Sector up 3% in 2024 || Wonder how
Most growth driven by affordable models
Traditional players seeing 30-40% revenue drops
Take Unacademy. They went big on physical centers but had to pull back because:
Running centers cost too much
Numbers didn't add up
Too many centers in same places
Online and offline didn't mix well
Vedantu stuck to screens and focused on making their tech better.
What Could Go Wrong?
As Physics Wallah heads toward going public in 2025, they need to watch out:
Teaching Quality
Keeping standards high everywhere
Making sure students actually learn
Staying true to what worked
Competition
Others copying their low prices
Old coaching centers going online
Local players fighting back
Using Tech Right
Making learning personal
Proving students learn better
Keeping the human touch
Money Matters
Watching the costs
Staying profitable
Growing without bleeding money
What's Next?
As one of the few profitable players in a sector that's seen:
87% funding drop in 2023
Multiple unicorn downgrades
Widespread layoffs
Business model pivots
Physics Wallah isn't just trying to make money - they're trying to prove you can build something lasting in education while keeping prices low. Their public listing will show if this approach works.
They'll need to:
Keep prices low while getting bigger
Make online and offline work together
Keep their culture as they grow
Show their students succeed
Everyone's watching because if Physics Wallah succeeds, others might follow their playbook.
Love it? Hate it? Meh!!! Do comment. Would love the feedback if you have reached so far.