PhysicsWallah Hits Rs.2,000 Crore Revenue Mark, but Losses Surge Amid Aggressive Growth Strategy
PhysicsWallah Hits ₹2,000 Crore Revenue Mark, but Losses Surge Amid Aggressive Growth Strategy
Edtech unicorn reports 160% revenue jump, but expenses skyrocket leading to a massive loss in FY24.
Noida-based edtech giant PhysicsWallah has posted impressive revenue growth, surpassing the ₹2,000 crore mark for the fiscal year ending March 31, 2024. The company’s operating revenue surged by an impressive 160%, reaching ₹1,940 crore, compared to ₹744 crore in FY23. However, despite this rapid growth, PhysicsWallah’s losses widened drastically, ballooning nearly 13.5 times to ₹1,131 crore from ₹84 crore in the previous year.
The dramatic rise in losses was primarily driven by a significant jump in expenses, which surged to ₹1,948 crore in FY24, up from ₹653 crore the previous year. A large portion of these expenses was attributed to non-cash adjustments following the company’s adoption of Indian Accounting Standards (Ind-AS) after crossing the ₹1,000 crore revenue threshold. These included increased liabilities from compulsorily convertible preference shares (CCPS), depreciation and amortization, and employee stock options (ESOPs).
PhysicsWallah’s CCPS expenses saw a massive increase from ₹67.1 crore in FY23 to ₹756 crore in FY24, while depreciation and amortization expenses grew from ₹82.6 crore to ₹298 crore. ESOP costs also saw a sharp rise, jumping from ₹38.3 crore to ₹151 crore.
Despite the sharp rise in losses, the company’s revenue growth is a result of its aggressive expansion strategy over the past two years. PhysicsWallah, which began as a YouTube channel in 2016 and formally launched as an edtech startup in 2020, has been diversifying into new business segments and making strategic acquisitions. These include the purchase of AI-based learning platform Xylem Learning and Knowledge Planet, which provides test preparation services to non-resident Indians.
PhysicsWallah’s fundraising efforts have also been successful, with a $210 million investment in September 2023 led by Hornbill Capital Advisers and Lightspeed Venture Partners. This fundraising round increased the company’s valuation to $2.8 billion, up from $1.1 billion earlier.
As the edtech sector shifts toward more cautious growth strategies, focusing on profitability, PhysicsWallah’s leadership, including CEO Alakh Pandey, remains optimistic. The company, which became a unicorn in 2022, expects to turn profitable in FY25 as its offline business begins generating significant returns. So far in the 2024-25 fiscal year, PhysicsWallah has already begun generating cash in the first and second quarters, recovering from a previous negative cash flow.
The company’s focus on expanding its offline business and maintaining its rapid pace of growth underscores its ambition to dominate the edtech market in the long run, even as it navigates the challenges of scaling profitably.
