PhysicsWallah (PW), one of India’s leading EdTech unicorns led by Alakh Pandey, faced a significant setback in the fiscal year ending March 31, 2023.
According to a report from Inc42, the company experienced a staggering 91% decline in net profit, plummeting from Rs 98.2 crore in the previous fiscal year to Rs 8.9 crore in FY23. This drastic decrease was primarily attributed to a substantial rise in expenses incurred by the startup.
PhysicsWallah’s Rapid Revenue Growth Amidst Rising Expenditure
Despite the substantial decline in profits, PhysicsWallah saw a remarkable surge in its operating revenue, which surged by 234% to reach Rs 779.3 crore in FY23 from Rs 233 crore in FY22. Moreover, the startup’s revenue soared to Rs 804.6 crore in FY23, marking a remarkable 243% increase from the previous fiscal year.
🚨 PhysicsWallah's FY23 Profit Falls 91% To INR 9 Cr From INR 98 Cr
Alakh Pandey’s remuneration also halved to INR 4.6 Cr in FY23 from INR 9.6 Cr in FY22
Employee Cost jumped ~10X to INR 414 Cr In FY23
More Details:https://t.co/bVPlxlKrYk
— Debarghya Sil (@debarghyawrites) February 13, 2024
However, this surge in revenue was accompanied by a staggering 671% rise in total expenditure, soaring to Rs 794.5 crore in FY23 from Rs 103.1 crore in FY22, as reported by Inc42.
PhysicsWallah’s Employee Benefit Expenses and Advertising Costs Surge
One of the significant contributors to PhysicsWallah’s increased expenditure was its employee benefit expenses, which witnessed a massive 878% surge, reaching Rs 413.8 crore in FY23 from Rs 42.3 crore in FY22. This significant rise in employee costs was attributed to the startup’s expansion and hiring initiatives.
Additionally, the company’s advertising expenditure rose sixfold, climbing to Rs 67 crore during FY23 from Rs 11 crore in the previous fiscal year. Moreover, PW’s rent expenses surged over 1,500% to Rs 57 crore in FY23 from Rs 3.5 crore in FY22, reflecting its aggressive expansion into the offline space.
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PhysicsWallah’s Aggressive Expansion and Strategic Acquisitions
PhysicsWallah’s journey into the unicorn club in 2022 with a $100 million funding round from WestBridge Capital and GSV Ventures marked a significant milestone in its growth trajectory. The startup has since embarked on an aggressive expansion strategy, diversifying its offerings and entering the offline education space.
With over 10,000 employees, PhysicsWallah has expanded its offerings to include post-graduate programs, upskilling platforms, and offline coaching options through its 60 Vidyapeeth centers across India. Additionally, the company has made strategic acquisitions, including a 50% stake in Xylem Learning and investments to strengthen its UPSC vertical and PW Skills platform. Despite facing challenges and undergoing employee layoffs to streamline operations, PhysicsWallah remains committed to revolutionizing education in India.
