Edtech startup Physics Wallah is set to raise ₹200-230 crore ($22-26 million) in a secondary funding round led by existing investor WestBridge Capital, according to two persons in the know. The deal values the company at $3.7 billion—up from $2.8 billion just six months ago.
Physics Wallah is also expected to offer to buy back stock options awarded to about 1,000 employees, one of the two people said. The transaction was closed last month, they added.
A secondary transaction refers to the sale of existing shares by investors or employees to new or existing investors, without the company issuing new shares or raising fresh capital.
The Noida-based company is preparing to go public later this year and is likely to file its draft papers next month, Mint reported earlier. This follows its $210 million round in September, led by Hornbill Capital Advisors and Lightspeed Venture Partners—its second fundraising during one of the toughest phases for India’s edtech sector. The round not only more than doubled its valuation but also hinted at the company’s IPO ambitions.
Westbridge and Physics Wallah did not immediately respond to queries sent by Mint on Tuesday morning.
Physics Wallah has been chasing aggressive growth over the past two years, entering new business segments and making acquisitions to expand into new markets. Its consolidated revenue nearly tripled to ₹2,015 crore in the fiscal year ended 31 March, but its losses surged on the back of a jump in expenses.
Physics Wallah was started as a YouTube channel in 2016 by co-founders Alakh Pandey and Prateek Maheshwari, and made a formal beginning as an edtech startup only in 2020. Physics Wallah became a unicorn, or a billion-dollar company, with its first funding round two years ago. The startup has raised over $300 million so far.
Physics Wallah’s co-founders Pandey and Maheshwari own 77.4% of the company, while Westbridge Capital has a 6.3% stake, as per data available with market intelligence platform Tracxn.
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Last year, Physics Wallah acquired Xylem Learning, an AI-based learning platform for entrance exam preparation, and Knowledge Planet that provides test preparation services to non-resident Indians. In 2022, it bought FreeCo, a doubt-solving platform and Physics Wallah’s first acquisition.
IPO on the horizon
In a bid to prepare for its public listing later this year, Physics Wallah has been bulking up its top deck. The edtech unicorn hired former Blinkit finance chief Amit Sachdeva as its chief financial officer in November last year.
Last month, Physics Wallah also named Ajinkya Jain as its group general counsel, company secretary, and compliance officer. Physics Wallah appointed Axis Capital, Kotak Mahindra Capital, Goldman Sachs, and JP Morgan as bankers and is scheduled to file its draft red herring prospectus (DRHP), Mint reported earlier.
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This comes at a time when after over two years of a funding slowdown and valuation mismatches in private markets, edtech startups like Imarticus, Classplus, and, Jaro Education are gearing up for a public listing.