Physics Wallah (PW) a startup that offers coaching for engineering entrance exams, on Friday, said it has raised $210 million in a Series B funding round at a $2.8 billion valuation, defying the funding slowdown that has heavily impacted the edtech sector.
A brainchild of Alakh Pandey and Prateek Maheshwari, PW’s funding round was led by Asia hedge fund Hornbill Capital, with significant participation from Lightspeed Venture Partners, along with its existing investors, GSV and WestBridge.
The round comes two years after the firm raised its Series A round of $100 million in its Series A round from Westbridge and GSV Ventures, catapulting the test-prep edtech startup into India’s coveted unicorn club.
The funding comes at a time when the Indian edtech industry is facing a severe funding crunch as investors adopt a cautious stance toward the sector. As a result, edtech startups in India are having to tighten their purse strings and even resort to drastic steps like layoffs to keep their bottom lines intact.
“The current fundraising process and the private market landscape have changed significantly compared to 2021 and early 2022. Back then, private markets were much more liberal, particularly regarding valuations. However, in the current environment, there is still considerable interest in high-quality assets, especially for businesses with strong core fundamentals in place.” Maheshwari said in an interaction with DealStreetAsia.
Commenting on the fundraising process, PW’s Vice President – Strategy & Corporate Development Vikram Bhardwaj said, “In 2022, raising funds was relatively straightforward. However, things have changed this time around. The layers of due diligence from an investor’s perspective have increased. There is now a greater emphasis on corporate governance and process orientation, with more rigorous scrutiny in these areas.”
Edited excerpts of the interview with Maheshwari:
