PhysicsWallah Faces Sharp Decline in Profits Amid Expansion Spree

Attention India
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Physics Wallah (PW), led by Alakh Pandey, experienced a significant profit downturn for the financial year ending March 31, 2023. Despite being the solely profitable ed-tech unicorn in India, witnessed a staggering 91% decrease in net profit, plummeting to INR 8.9 Cr in FY23 from INR 98.2 Cr in the previous fiscal year. This decline was primarily attributed to a substantial increase in expenses.

Background and Growth Trajectory:

Founded in 2016 as a YouTube channel by Alakh Pandey, PW initially focused on preparing students for competitive exams. Over time, it evolved into a comprehensive ed-tech startup, expanding its course offerings. In 2020, Prateek Maheshwari joined as a co-founder. The startup embarked on an expansion spree, both offline and online, demonstrating rapid growth in recent years.

Revenue Surge and Expenditure Surge:

PW’s operating revenue surged by 234% to INR 779.3 Cr in FY23, with total revenue reaching INR 804.6 Cr, marking a 243% increase from FY22. However, this revenue growth was overshadowed by a significant expense escalation, which soared by 671% to INR 794.5 Cr in FY23 from INR 103.1 Cr in FY22.

Breakdown of Expenditure:

1. Employee Benefit Expenses:

The most substantial increase in expenditure was observed in employee costs, soaring by 878% to INR 413.8 Cr in FY23 from INR 42.3 Cr in FY22. With over 10,000 employees, PW invests significantly in remunerating star teachers, reflecting the competitive landscape of tech startups. Notably, Alakh Pandey’s remuneration halved to INR 4.6 Cr in FY23.

2. Advertising Expenditure:

PW’s advertising costs surged sixfold to INR 67 Cr in FY23 from INR 11 Cr in the previous fiscal year, indicating intensified marketing efforts to expand its market presence.

3. Rent Cost:

Driven by its offline expansion, PW’s rent expenses skyrocketed over 1,500% to INR 57 Cr in FY23 from INR 3.5 Cr in FY22, reflecting investments in physical infrastructure.

Expansion Initiatives:

PW entered the unicorn club in 2022 following a $100 M funding round from Westbridge and GSV Ventures. Since then, it has diversified its offerings, ventured into offline education, and made strategic acquisitions. The startup now offers post-graduate programs, upskilling platforms, offline and hybrid coaching options, and recently launched PW Gurukulam School for primary classes.

Strategic Acquisitions and Investments:

As part of its expansion strategy, PW acquired a 50% stake in Xylem Learning for $61 Mn in June last year. Additionally, it announced investments of INR 100 Cr to bolster its UPSC vertical and INR 120 Cr to strengthen PW Skills.

Workforce Optimization Amid Expansion:

In a move to extend its runway and streamline operations, PW reportedly terminated 70-120 employees in November last year. While the layoffs were attributed to performance issues, they also aimed to conserve capital amidst expansion efforts.


Despite a remarkable surge in revenue, PhysicsWallah faced a substantial decline in profits due to a surge in expenses driven by aggressive expansion initiatives. As the tech unicorn continues to navigate the evolving landscape of online education in India, balancing growth with financial sustainability will be crucial for its long-term success.

-Prisha Jaiswal

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