PhysicsWallah allocates $40 million for M&As

• ByStartupStory     |    December 27, 2022

With the purchase of Bengaluru-based iNeuron.ai last week, PhysicsWallah, which is backed by Westbridge Capital, entered the upskilling market. But the acquisition is only one element of PhysicsWallah’s overall strategy. Under the direction of co-founder Prateek Maheshwari and the strategy team, the business hopes to acquire several companies in order to grow into a full-stack edtech company. 

The PhysicsWallah team has been continually looking for acquisitions to support the company’s expansion into new sectors and markets ever since raising $100 million in its Series A investment round from Westbridge and GSV Ventures in October and attaining unicorn status in its first fundraising.

Following the fundraising, PhysicsWallah bought at least three businesses: PrepOnline, an online platform for coaching medical admission exams, Altis Vortex, a publisher of study guides, and iNeuron.ai. In August, it bought out startup FreeCo that dealt with skepticism

Maheshwari said, “We’re looking to build across categories, primarily test prep, upskilling, and international. Our acquisition strategy is evolving continuously,”.

PhysicsWallah wants to keep growing while continuing to turn a profit, which is an uncommon feat in the startup sector. Additionally, it is already profitable, unlike many other edtech platforms. In the year ending in March 2022, its standalone net profit increased by more than 14 times, from 6.93 crore to 97.8 crore. 

At first, PhysicsWallah had budgeted up to $20 million for purchases. The business has since opted to treble its acquisitions budget, nevertheless. Maheshwari stated that at some point, “we might use more money from the $100 million fundraise to fund our acquisitions.”

By providing lectures and tutorials on YouTube, the PhysicsWallah app, and its website, Maheshwari and instructor Alakh Pandey’s 2020 startup PhysicsWallah aids students in their preparation for engineering and medical admission exams. It faces competition from brands like Vedantu, Unacademy, and Byju’s.

The business is currently expanding its range of courses by creating them internally or through strategic partnerships. Maheshwari further added,“In terms of adding exam categories, we are looking to acquire either the winner or runner-up. Alakh brought the pedagogy for exams like JEE and NEET, but for other entrance tests, we need to find the right teams that have personal connections with students.” 

After purchasing iNeuron, PhysicsWallah is thinking about making another purchase in order to upskill. “We are starting with coding courses but will soon introduce non-coding courses. We want to help final-year students, as well as early career engineers, land their first or second jobs,” Maheshwari added. 

According to Maheshwari, PhysicsWallah is in preliminary discussions with two Indian startups about expanding internationally, and he anticipates that the agreements will be signed within the next six months. “The acquisitions will help us expand to markets such as the US, the UK, and the Middle East,” says Maheshwari.

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