India’s newest and the only profitable edtech unicorn PhysicsWallah has reported a strong growth in its FY22 (2021-22) profit as the company’s revenue soared nearly 10X during the period, according to an internal document seen by Moneycontrol.
The GSV Ventures-backed unicorn reported a net profit of Rs 97.8 crore for FY22, up nearly 14 times from its FY21 profit of Rs 6.93 crore, the document showed. Its revenue from operations grew nearly 10-fold during the period to Rs 232.5 crore from Rs 24.6 crore in FY21, according to the document. PhysicsWallah reported total revenue of Rs 234.1 crore for the year ended March 2022 on a standalone basis.
During FY22, PhysicsWallah’s total expenses grew seven times to Rs 103.2 crore, thanks to a 21-fold rise in its employee benefit costs to Rs 42.18 crore. PhyiscsWallah started operations in June 2020 and FY22 was the first full year of operations for the company. The company had raised $100 million earlier this year from GSV Ventures and WestBridge Capital at a valuation of $1.1 billion.
Queries sent to PhysicsWallah remained unanswered.
In a recent interview with CNN’s Bits to Billions show, Alakh Pandey, co-founder and CEO of PhysicsWallah had said that he expects FY23 revenue to top Rs 1,200 crore. He also said that the company will be launching new products during the year. If one goes by Pandey’s projections, PhysicsWallah will be valued at around seven times its trailing twelve-month multiple, which will be among the lowest for edtech startups in the country.
PhysicsWallah competes directly with edtech companies such as Byju’s, Vedantu, and Unacademy among others, which had trailing twelve-month revenue multiples in the mid-teens.
Byju’s and Unacademy had also seen their losses widening during the pandemic years due to aggressive spending on marketing and ESOPs (employee stock ownership plan). Byju’s spent Rs 465 crore in FY21 on ESOPs, up from Rs 25 lakh in FY20, while Unacademy spent Rs 1,235 crore in FY22, up from Rs 481 crore in FY21. Both companies also spent thousands of crores on advertising and marketing. PhysicsWallah's marketing spending could not be ascertained immediately, but its 'other expenses,' under which companies account for marketing expenditures, for FY22 were Rs 22.08 crore.
PhysicsWallah was formally founded as a bootstrapped company in mid-2020 by Alakh Pandey and Prateek Maheshwari. Before PhysicsWallah, Pandey used to run a YouTube channel by the same name that has close to seven million subscribers and over 1.2 billion views. The company recently also forayed into the offline coaching space by opening an offline coaching institute in Kota, also known as India’s coaching capital.
PhysicsWallah’s revenue and profit growth in FY22, and strong revenue growth projections for FY23, come at a time when online edtech companies are struggling in India to stay afloat as demand for online learning has fallen post the pandemic. Moreover, to compound matters, funding to the sector has dried up. Moneycontrol had reported how edtech companies in India are struggling post the pandemic and are scrambling for newer revenue streams.