Indian startups are facing numerous roadblocks in the post-covid era. Why and how? Well, the reasons are too many to count! Funding winter, huge losses, rising competition, recession, etc. are some of the significant causes of the slumping startup industry. While many startups like Swiggy, Zomato, Sugar, BharatPe, OYO, etc. are toiling hard incessantly to make profits. There are some startups that are already swimming in the pool of profits. PhysicsWallah is one such startup that enthralled folks with its astonishing profits in FY22. PhysicsWallah revenue grew 10X in FY22 with Rs.100 crore profits!
How did PhysicsWallah revenue reach sky-high when other startups are struggling to make a decent chink of money? You will get the answer in this article. Stay tuned!
PhysicsWallah: A Brief Overview
PhysicsWallah is an ed-tech platform that provides educational resources, particularly for students who are studying physics and other science subjects. It was founded by Alakh Pandey, a physics teacher and YouTube personality who has gained a large following for his engaging and informative videos on physics.
The PhysicsWallah platform offers a range of resources, including online video lectures, notes, practice problems, and quizzes. These are specially designed to help students understand complex physics concepts and excel in their exams. The platform has become popular among Indian students. Particularly those preparing for competitive exams like the Joint Entrance Examination (JEE) and the National Eligibility cum Entrance Test (NEET).
PhysicsWallah has helped to democratize access to quality education. Currently, it has more than 18 million subscribers on YouTube. Thus, it helped students to learn and excel in physics, regardless of their geographic location or financial means.
Let’s have a quick detour to the financials of PhysicsWallah in the last two fiscal years-
|PhysicsWallah Financials||FY22||FY21||Growth Rate|
|Revenue||Rs.234.09 crore||Rs.24.6 crore||10X|
|Expenses||Rs.103.2 crore||Rs.15.36 crore||6.7X|
|Profits||Rs.98.23 crore||Rs.6.92 crore||14.2X|
As you can see, despite the huge expenditure, PhysicsWallah managed to make good profits. Its 10X growth rate in revenue helped to scale over 14.2X annual profits worth Rs.98.23 crore. Also, the EBITDA (Earnings before interest, taxes, depreciation, and amortization) margin improved by 1,948 base points. Thus, you can say that PhysicsWallah spent 44 paise to earn a single rupee of operating revenue.
Do you know, PhysicsWallah is the sole startup that entered the unicorn club with a profitable income? Not only it survived the funding winter without firing any employees but also made a profitable unit economics! As per the latest reports, the primary sources of PhysicsWallah revenue were-
- YouTube: With 9.17 million subscribers, PhysicsWalla earned almost half of its revenue through online classes on YouTube.
- Educational Services: Offline Coaching & Online Classes on PhysicsWallah app
- Sale of Study Materials: Books, Notes, and Test Papers
Below is the comparison of PhysicsWallah revenue for the last two fiscal years-
|PhysicsWallah Revenue||FY22||FY21||Revenue Growth|
|Operating Revenue||233 crore||24.6 crore||9.5X|
|Cash from Operations||70.2 crore||44.6 crore||57.4%|
Youtube helped PhysicsWallah to establish a large audience which eventually became its loyal customers. Besides its online coaching, it also earns a good amount of money through offline coaching centers. Some of the prominent ones are located in-
- Bhopal, Varanasi
Expenses: PhysicsWallah’s Expenditures
Now here comes the crucial part. To make profits you need to keep the expenses lower than the amount of revenue you anticipate to earn. PhysicsWallah did the exact same thing! Although it increased the expenditure it was quite lower as compared to its ed-tech competitors like Unacademy & Byju’s.
Following table provides a brief breakdown of PhysicsWallah’s expenditures-
|Employee Benefit Expenses||Rs.42.34 crore||Rs.2 crore|
|Advertising & Promotional Expenses||Rs.11 crore||Rs.0.14 crore|
|Legal & Professional Fees||Rs.17.3 crore||Rs.116.2 crore|
|IT Costs||Rs.3.72 crore||Rs.0.03 crore|
|Transportation Cost||Rs.4.07 crore||–|
|Other Operating & Admin Expenses||Rs.24.57 crore||Rs.1.57 crore|
Profits of PhysicsWallah
Thus, with 10X growth scale of revenue, aided the company to earn annual profits worth Rs.98.23 crores in FY22. Last year (FY21) it earned a profit of Rs.6.92 crore. Now, you must have realized why and how PhysicsWallah caught the eyeballs of the public with its successful business.
PhysicsWallah’s sky-rocketing revenue came at a time when the other ed-tech companies were struggling to get back on track. The company launched its full-fledged operations during the soaring days of covid i.e. June 2020. Also, it raised its valuation to $1.1 billion after receiving funds from GSV Ventures and WestBridge Capital. Now, the founders are expecting to earn revenue worth over Rs.1,200 crore in FY23.