YouTube Channel To A Billion Dollar Company — India’s First Profitable Edtech Unicorn

YouTube Channel To A Billion Dollar Company — India’s First Profitable Edtech Unicorn

PhysicsWallah, known as PW, an edtech company, is the newest Indian startup to join the unicorn club. At a valuation of $1.1 billion, the company has raised $100 million in a Series A round from Westbridge and GSV Ventures.

A “unicorn” is a phrase used in finance to indicate a privately held company with a more than $1 billion valuation. Aileen Lee, a venture capitalist, coined the term in 2013 to represent a small number of high-value tech businesses worth more than $1 billion.

The existence of unicorns is a contentious topic. While some experts feel that unicorns are simply a result of technical advancement and innovation, others believe that the growing number of unicorns is a symptom of an industry bubble. The valuation of unicorns is based on valuations created by venture capitalists and investors who took part in the company’s fundraising rounds. Because unicorns are all startups, their worth is essentially determined by their potential for growth and predicted development.

The value of unicorns is unrelated to their actual financial performance or other essential information. Many companies have not made any profits, despite their excessively high valuations.

Unicorn valuation is a complex process that entails weighing various criteria and developing long-term forecasts. The business models of such organisations frequently cause further issues. Some businesses become the first of their kind in their field, making the assessment process even more difficult.

PhysicsWallah is the first edtech company to achieve this milestone this year, and it is India’s 101st corporation to receive this honour.  

The eight-year-old company joins the likes of Byju’s, Vedantu, Eruditus, Vedantu, and Upgrad are on the list of edtech unicorns.

The new money will be used to expand the company’s business and the market itself, establish more learning centres and increase its course offerings. It plans to release educational content in Bengali, Marathi, Tamil, Telugu, Gujarati, Odia, Malayalam, and Kannada, among other Indian languages.

“This recent development will enable us to expand our goal and execute new initiatives to enhance students’ learning journeys, allowing them to reach new heights in their careers,” Alakh Pandey, founder and CEO of PhysicsWallah stated.

About EdTech Unicorn

An EdTech Unicorn is a privately held corporation with a market capitalisation of $1 billion or more. There are now 32 EdTech unicorns operating throughout the world. North America and Asia are home to nearly all EdTech businesses. Indeed, fourteen of these firms are headquartered in the The United States, seven in China, and five in India. Taiwan, Canada, Austria, Australia and Israel are the locations of the surviving EdTech unicorns. 

Companies that provide private tuition, homework, and revision help make up a substantial component of the Asian EdTech Unicorns. The number of global EdTech Unicorns is projected to increase as the global EdTech market continues to rise. With an influx of EdTech companies from Europe and Australasia, the Asian industry, is expected to grow even more. This is evidenced by the recent arrival of enterprises from Australia, Austria, and Israel (June 2021).

Several EdTech Unicorns went public, including Coursera, which is presently listed on the NYSE following its IPO in March 2021 (with a valuation of over $7 billion). Another example is the Chinese EdTech company Zhangmen, which went public in June 2021 with an IPO that valued the company at $1.8 billion. With a market capitalisation of $3.7 billion, Udemy dropped off the list in October 2021.

The impact of COVID-19 can be credited in part for the increase in the number of EdTech unicorns. Entrepreneurs in the EdTech space have recognised the opportunity afforded by individuals spending more time online. Platforms that help students and adults follow courses, receive tuition, and learn new skills have proliferated. Schools and educational establishments are more likely to invest in EdTech, realising the impact of COVID-19 and the need to have systems in place should a similar situation arise again.

The global EdTech unicorn list will likely remain lively in the coming years. In 2021 alone, thirteen EdTech companies joined the list, and four left the list following successful IPOs.

About Physics Wallah

Alakh Pandey created Physics Wallah, an EdTech firm, in 2014. It is an e-learning platform that provides high-quality learning opportunities at a low cost. This firm offers lectures and solutions on various subjects for students in grades 6 through 12, as well as JEE, NEET, and other entrance exams. Physics Wallah provides live and recorded lectures, as well as question and answer sessions, organised materials, and examinations to assist students in evaluating themselves.

Physics Wallah began as a YouTube channel and had already taught over 6 million students and has over 13,700 video lectures on its website. Physics Wallah, which offers both free and paid classes, has earned the trust of thousands of students by providing knowledgeable and high-quality instruction.

Physics Wallah – Industry 

The EdTech industry includes Physics Wallah. The expansion of the EdTech industry in India may be traced back to the last decade. In recent years, their rise has been far too rapid. According to statistics, roughly 4,450 EdTech businesses sprang up in the country between 2014 and 2019. The EdTech market is currently predicted to be worth $750 million in 2020. This may grow to a stunning $4 billion in the next five years.

In the last decade, funding and other investments into these firms have surged 32 times. In the long run, the EdTech industry will supplant traditional learning. However, academics and venture capitalists predict that omnichannel learning (both online and offline) will reign supreme for at least a decade.

Physics Wallah – Founders and Team

Alakh Pandey and Prateek Maheshwariare are the founders of Physics Wallah.

Alakh Pandey

Physics Wallah’s creator and CEO is Alakh Pandey. He was born in Prayagraj, Uttar Pradesh, on October 2, 1991. Since his school days, Pandey has a passion for teaching. He aspired to be an IITian but failed to pass the admission exam. Pandey, too, was a college dropout who began his work as a physics instructor at a coaching facility. He wants to provide pupils with the finest possible learning experience at a reasonable price.

Prateek Maheshwari

Prateek Maheshwari co-founds Physics Wallah. IIT Varanasi awarded him a bachelor’s degree in technology. Prateek Maheshwari was a co-founder of NightPanda, Moon2Noon, PenPencil, and Edu4All before teaming up with Alakh Pandey for PW. His background as a founder proved to be an invaluable asset to Physics Wallah.

Physics Wallah – Startup Story

Alakh Pandey’s enthusiasm for teaching drew him to a coaching institute in Allahabad after he dropped out of college. He honed his teaching skills there. His teaching style was well-received, and the Physics he taught was well-liked by all. Alakh Pandey launched a YouTube channel called ‘Physics Wallah’ in 2016 with the goal of reaching out to more students. This is where the seed for PW was planted, and the company began to sprout. 

Physics Wallah – Mission and Vision

The goal of Physics Wallah is to give “education for all, regardless of socioeconomic status.” The company aspires to make education accessible to all students. It thinks that education can transform everything. Physics Wallah is going on with this as its motto.

The name ‘Physics Wallah’ came from Alakh Pandey’s popular physics courses. In 2016, he titled his YouTube channel after the stated cause. ‘Physics Wallah’ became his brand identity and the name of the company later.

Physics Wallah – Business and Revenue Model

Physics Wallah’s business provides lectures and training to students in various online and off classes. It also offers pupils preparation for national-level entrance exams.

The majority of Physics Wallah’s revenue comes from YouTube advertisements. There’s also an optional subscription package that provides you access to private doubt-resolution sessions. In addition, PW charges a fee for courses, lectures, and materials. The fee is determined by the students’ chosen level, course, or plan.

Physics Wallah – Funding and Investors

Since its inception as a YouTube channel six years ago, Physics Wallah has been bootstrapped till 2022. Alakh Pandey, in reality, used his YouTube earnings to register the company and develop the PW app in 2020. 

Physics Wallah’s finances operated in this manner until June 2022, when a breakthrough occurred. PhysicsWallah (popularly known as PW) has become India’s 101st unicorn by raising $100 million in Series A funding from WestBridge Capital and GSV Ventures at a time when educational technology (edtech) startups are feeling the pressure to raise funds and are looking to lay off employees to manage costs.

After the deal was completed, the company was valued at $1.1 billion. The company has been bootstrapped so far, so Series A funding is the first time outside investors have come on board. After Allen Career Institute in Kota received $600 million from Bodhi Tree Systems, the second bootstrapped business to raise a significant amount in Series A.

PW will use the cash for business expansion, branding, opening additional learning centres, and introducing new courses. PW has 5.2 million Google Play downloads, a 4.7 rating, and 6.9 million YouTube subscribers.

Unlike some edtech platforms, such as Byju’s and Vedantu, which have recently begun to expand their offline presence, PW has created over 20 centres in 18 cities, with over 10,000 students enrolled for the FY23 session.

PW offers lectures, videos, notes, and other educational materials. In 2020 and 2021, almost 10,000 students passed competitive tests such as the National Eligibility Entrance Test and the Joint Entrance Examination. According to the platform, at least one out of every six medical students and one out of every ten engineering students in India are from PW.

Sandeep Singhal, Managing Director of WestBridge Capital, says: “In the last two years, the Indian edtech ecosystem has grown significantly. On the other hand, recent events have proven the critical need for a well-functioning edtech infrastructure. PW provides learners with long-tail value by providing high-quality education at an affordable cost. PW is a rare startup with a deep understanding of education, which India urgently requires today.”

Unlike many other edtech companies, PW is profitable. According to regulatory records, revenue for 2020-21 was Rs 24.52 crore, with a profit of Rs 6.93 crore.

“Since our beginning, we have focused on delivering high-quality education with affordability at the forefront, ensuring learners from all walks of life, complete their further education, and increase their career trajectory without difficulties,” says Alakh Pandey, PW’s founder and founder and CEO.

“Extraordinary entrepreneurs are democratising learning and skills delivery for 90% of India still untouched by the edtech revolution,” says GSV Ventures Managing Partner Deborah Quazzo. PW is one of these businesses. The company is changing the test prep market, giving low-cost, high-quality solutions with remarkable learning outcomes for over 6 million students and increasing, led by renowned YouTube STEM educator Pandey and tech executive Maheshwari.”

Currently, the company employs 1,900 people, including 500 teachers and 90-100 technological experts. It also has 200 associate professors on staff to help students with their questions and another 200 experts who generate exam questions and term papers.

“The company has been successful from its inception, with positive cash flows and reserves,” says Pandey, adding that revenue in 2021-22 is up ninefold from the previous year. For FY23, our current run rate is $65 million.”

PW is preparing to provide educational content in nine vernacular languages, including Bengali, Marathi, Tamil, Telugu, Gujarati, Odia, Malayalam, and Kannada as its future growth goals. By 2025, the goal is to reach every nook and cranny of the country and connect with more than 250 million kids. The company plans to close the accessibility gap by constructing 20 offline coaching classrooms across India, dubbed ‘Paathshala.’

Physics Wallah – Growth

Despite a poor start in the first year, Pandey quit his coaching job in 2017 to pursue his dream of becoming a full-time YouTuber. The channel gradually grew in popularity, and by 2019, it had a total of 2 million subscribers. The demand for Physics Wallah skyrocketed when the country was put on lockdown because of the Covid-19 pandemic.

As a result, Alakh Pandey decided to broaden his platform and launch an online lecture application. PW Pathshala, a firm subsidiary, offers students both offline and online education. Physics Wallah has educated over 60 lakhs of students to date. This company has 16 PW Pathshala centres and 1,500 employees, 300 of whom are teachers. Its goal is to provide students with the greatest possible learning experience.

Physics Wallah – Challenges Faced

Due to overwhelming traffic, the Physics Wallah app collapsed at its introduction in May 2020. This crash was caused by the rapid influx of over 2 lakh pupils into the app. The technical fault took weeks to fix as the website traffic increased. Alakh Pandey was concerned that the pupils, who had paid for the classes, would feel duped. However, because of his reputation over the years, students began to trust him and return once the problems were resolved.

In 2021, the next hurdle occurred when competitors began throwing stones at the corporation. Unacademy made Alakh Pandey an offer of Rs 75 crore, which he instantly turned down. The competition then began stealing PW employees and many of them departed the organisation in a short period of time. Then, with the help of his students and a never-say-die attitude, Pandey returned strong and led the company to Unicorn status, joining the ranks of Byju’s, Unacademy, Vedantu, and a few other EdTech companies.

Physics Wallah – Future Plans

Along with improving its online platform, Physics Wallah wants to create more offline centres and launch more courses. The company also intends to expand its material to nine Indian vernacular languages, including Gujarati, Malayalam, Tamil, Telugu, Kannada, and others. This will increase Physics Wallah’s student base, which is expected to reach over 250 million by 2025.