How Alakh Pandey defied start-up clichés to build a successful edtech company

Physicswallah (pw), the edtech unicorn founded by Alakh Pandey, is gearing up to go public this year. In a sector that has been gripped by scepticism, Pandey has steered PW to a valuation of $3.7 billion, surpassing rivals like Unacademy ($3.4 billion) and Vedantu ($912 million), according to Tracxn. Yet, for Pandey, the journey is not just about the numbers. “I am a teacher first,” he says, preferring the role over that of Co-founder and CEO.

Unlike many founders, Pandey dismisses the idea of aggressive acquisitions, instead framing his company’s expansion as a series of partnerships. PW has strategically integrated platforms like Kerala-based Xylem Learning and Jodhpur-based Utkarsh Classes. "This is a teacher’s world, and it runs on emotions,” he tells BT. “I do not use the term ‘acquisition."

PW started in 2016 as a YouTube channel where Pandey provided free lessons. Monetisation was not a concern until 2020, when he launched the PhysicsWallah app, charging students Rs 1,000 for live classes. What followed was an unexpected surge-35,000 students signed up, overwhelming the platform and causing the app to crash.

“The app failed not just on the first day, but second, third, and so on. No edtech company had ever seen such a massive influx of students for a single live class-unless it was celebrity-led,” Pandey recalls. The technical failure left him devastated. He took to YouTube, writing a heartfelt community post apologising to students and admitting he had made a mistake.

After that setback, Pandey was determined to refund every student. However, what happened next was unexpected. Instead of withdrawing, students and their families rallied behind him, encouraging him to continue.

That episode was a turning point for the edtech start-up. Today, PW has an audience of nearly 50 million students across more than 100 YouTube channels, with five million enrolled in paid courses. Its revenue has jumped manifold in recent years, from Rs 234.7 crore in FY22 to Rs 2,015 crore in FY24, even as it has slipped into losses-from a profit of Rs 98 crore in FY22, it reported a loss of Rs 84 crore in FY23, which increased significantly to Rs 1,131 crore in FY24 because of employee stock option plans, non-cash adjustments and a new accounting standard after revenue surpassed Rs 1,000 crore. For Pandey, the lesson is clear: in education, trust matters more than anything else.

The Indian edtech sector is expected to reach $29 billion by 2030. PW dominates in test preparation, but Pandey says it missed out on two major streams while growing: regional language expansion and K-10 penetration.

PW holds a 35% share in the IIT-JEE and NEET preparation segment, says Pandey. Looking ahead, the company is setting its sights on K-10 education, where Pandey sees a significant growth opportunity.

PW also aims to extend its footprint nationwide through ‘Project Bharat,’ an initiative that leverages artificial intelligence (AI) and teachers to expand its reach. “PW has traditionally been dominant in Uttar Pradesh, Bihar, and Maharashtra, followed by Rajasthan. With this new project, we want to penetrate western, eastern, and southern markets,” says Pandey.

While expanding into regional language education and broadening its presence remains key focus areas, PW’s offline learning centres, Vidyapeeth, which it established in 2022, have faced initial hurdles. “Expanding Vidyapeeth too quickly was a mistake, and we learned from it. Offline education is capital-intensive, and for the first time, students expressed concerns that PW was changing. We took that feedback seriously and corrected course,” says Pandey. Now, Vidyapeeth is growing at a more measured pace, with a presence in 105 cities across India.

Talking to Business Today, Atul Thakkar, Director of Investment Banking at Anand Rathi Advisors, says as PW expanded into offline coaching, it faced initial challenges. The company entered the space when several established players were struggling.

Many traditional coaching giants have faltered-Resonance has scaled down operations, the once-thriving coaching hub of Kota has seen a sharp decline, with student footfall dropping by 40%, according to Thakkar.

PW itself had ventured into Kota but returned several rental properties within 12-18 months as part of strategic adjustments. That is also the reason for a dip in profitability but the idea is to gain market share. Despite these shifts, PW stands to benefit as other offline players like Allen and Sri Chaitanya Educational Institutions are not expanding aggressively. Rivals Unacademy and Vedantu have lost momentum largely due to funding crunch, profitability issues and return of offline coaching.

PW’s calculated expansion could position it as a dominant force in India’s offline education market where Narayana would also be a beneficiary.

With PW going for an IPO, some have wondered if it is too soon to go public. "My idea is that an edtech company which in any single segment has Ebitda north of Rs 150 crore should go for an IPO. From that perspective, PW ticks the box," says Thakkar. However, he says PW’s expansion strategy means it is “spreading itself in multiple trajectories". But the requirements of higher education, K-12 and coaching are completely different.

PW currently employs 4,440 faculty. While the company continues to invest heavily in AI, Pandey acknowledges the challenges ahead. “We have to run, or we will be left behind,” he says. The edtech firm is reportedly building small language models to solve questions in physics, chemistry, mathematics, and biology.

For now, he remains committed to ensuring that PW stays true to its core mission-delivering quality education while preserving the human touch that built its foundation. Clearly, confidence isn’t in short supply, as evidenced by the fact that it is looking to go ahead with its IPO despite the choppy markets.

@PalakAgarwal64