Edtech Unicorn Physics Wallah Records Heavy Loss In FY24, Worth INR 1,131 Cr

Neha KamathNovember 8, 2024

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Three points you will get to know in this article:

The key reason for the large spike in the loss in FY24 was a change in the fair value of the CCPS and an increase in ESOP and personnel expenses.
Physics Wallah revised their FY23 bottom line due to a change in accounting regulations. It earlier declared a net profit of INR 8.9 crore in FY23.
The startup’s operating revenue increased 2.6 times to INR 1,940.4 Cr in FY24 from INR 744.3 Cr the prior year.

Physics Wallah Witness Big Losses In FY24, Multiple Reasons For the Loss

Physics Wallah (PW), an edtech unicorn, reported a consolidated net loss of INR 1,131.2 crore in fiscal year 2023-24 (FY24). This was an almost 13.5X increase from a loss of INR 84.06 crore in FY23.

PW, founded in 2016 by Alakh Pandey and later joined by Prateek Maheshwari in 2020, began as a YouTube channel and has since grown into a full-fledged educational technology firm. It offers online and offline tutoring and study materials for a variety of competitive exams, including NEET and JEE.

The key reason for the steep increase in losses in FY24 was a decrease in the fair value of CCPS, as well as an increase in ESOP and personnel expenses.

The startup stated that the change in fair value of CCPS in FY24 cost them INR 756 Cr, compared to INR 67.1 Cr in FY23. ESOP expenses nearly doubled to INR 151 crore during the year under review, up from INR 38.3 crore in FY23.

Physics Wallah Revenue, Valuation and Funding

It is worth noting that the company altered its bottom line for FY23 due to a change in accounting regulations. It previously declared a net profit of INR 8.9 crore for the fiscal year ended March 2023.

In terms of income, the startup’s operating revenue increased 2.6 times to INR 1,940.4 crore in FY24, from INR 744.3 crore the previous year.

In September of this year, the edtech unicorn raised $210 million in its Series B fundraising round, led by Hornbill Capital, for a post-money valuation of $2.8 billion. Lightspeed Venture Partners joined the investment round, as did existing investors GSV and WestBridge.

Physics Wallah’s Expenses, Major Costs

Physics Wallah’s overall expenses increased by almost 280% to INR 3,279.1 crore from INR 862.01 crore in FY23. Here’s a breakdown of expenses:

PW spent INR 1,158.96 crore on staff costs, up 180% from INR 412.5 crore in FY23.

The firm reduced its brand promotion operations in FY24, with expenses falling more than 70% to INR 19.56 Cr from INR 67.09 Cr in FY23.

Expenditure in this category increased 297% to INR 298.2 Cr in FY24 from INR 75.12 Cr the previous year.

As the edtech giant began its offline expansion in FY24, it paid rent of INR 32.72 crore, up from $0 the previous fiscal year.

It is also noting that “miscellaneous expenses” were PW’s largest cost centres, with the company spending INR 1,452.7 Cr in FY24, up from INR 169.73 Cr in FY23. However, it did not provide a breakdown of these charges.