Transaction:
- PhysicsWallah, an online coaching platform raised $210 million in a funding round led by Hornbill Capital and Lightspeed along with existing investors GSV and WestBridge, valuing the company at $2.8 billion.
- The round also included 15-20% of secondary share sale by the management and employees amounting to around $30-40 million.
About Physics Wallah:
- Incorporated in 2020, by Alakh Pandey and Prateek Maheshwari provides online and offline courses for JEE, NEET and other entrance and state board exams.
- It produces 9,500 hours of educational content every week with a student base across 18,808 pin codes.
About Investors:
- Founded in 2014, Hornbill Capital is an advisory firm that assists offshore fund managers to invest in India particularly in Internet, technology, consumer products, services sectors and having expertise in growth stage PE investments led the funding round.
- Founded in 2000, Lightspeed Venture Partners is a global VC firm having portfolio investments in Acceldata, Acko, Foxy, Oyo, Razorpay, Sharechat, Zepto also participated in the round with the existing investors GSV and Westbridge.
Rationale:
- The funds will be used to expand its offline presence, diversify into new regions and potentially look at acquisitions.
- It also aims to expand into the K-12 formal education segment, enhance its content and publications, and pursue inorganic growth through mergers with community-driven education platforms.
- Currently it operates 150 centers across 105 cities and plans to add another 50 centers and 1000 employees this year to build capacity in existing business and support new initiatives.
- The investment significantly boosted the company’s post-money valuation to $2.8 billion, a 2.5x increase from its previous $1.1 billion valuation when it became a Unicorn.
- In June 2022, the startup raised its maiden institutional round of $100 million at a valuation of $1.1 billion led by Westbridge and GSV Ventures.
- Over the years, the company has acquired several subsidiaries including iNeuron, PW Skills, PW Institute of Innovation, and Xylem Learning.
- So far in 2024, the Indian edtech sector has seen $215 million in funding, recording a modest rebound from the $321 million secured in full year 2023.
- Last few years have been a challenging period for the Ed-tech sector where many companies are struggling, particularly following the troubles of poster child Byju’s. However recent fundings of Softbank backed Unacademy and Physicswallah are showing that the players are pivoting towards more resilient offline models and have been able to generate investor confidence lately.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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