PhysicsWallah Invests Rs 500 Crore in Xylem Learning to Acquire 50% Stake
Key Highlights :
PhysicsWallah, the Edtech startup founded and led by Alakh Pandey, has announced an investment of Rs 500 crore in Kerala-based hybrid learning platform Xylem Learning. The investment will be spread over the next three years, and will be used to acquire a 50% stake in the company. The deal involves the purchase of fresh shares and a part of the stake held by Xylem’s existing investors in cash and stock. A portion of the investment will be towards enhancing the learning models of Xylem.
This is the latest in a series of acquisitions made by PhysicsWallah over the last one year. The investment is part of PhysicsWallah’s goal to consolidate its presence in South India. Xylem, which offers test prep courses for exams such as NEET and JEE, is currently present in Kerala and will now expand to Tamil Nadu, Andhra Pradesh and other southern markets.
The investment will be used to propagate the Xylem model of hybrid learning to other adjoining sister states. To do this, it will require robust team building, content development, technological innovation, expansion in other categories and hybrid centres. PhysicsWallah will also look at M&As (mergers and acquisitions) in the South. Xylem founder and CEO Ananthu S will drive the South India business.
Xylem plans to double its revenue in FY24 to Rs 300 crore, from Rs 150 crore in FY23. The platform currently provides free classes to over 3 million students through its 30 YouTube channels, and has more than 100,000 paid students for various online courses and 30,000 students in its offline/hybrid centres located across Kerala. It also operates 10 tuition centres and a school-integrated programme in seven schools.
PhysicsWallah’s investment follows its strategy of expanding into the vernacular learning segment for test-prep courses. Through its YouTube offerings, the profit-making company has ventured into West Bengal, Gujarat, Karnataka, Andhra Pradesh and Telangana. Earlier this year, it was reported that PhysicsWallah was planning to double the allocation for mergers and acquisitions to $100 million with an aim to acquire startups operating in various test-prep segments.
Founded by Pandey and Prateek Maheshwari, PhysicsWallah gained the unicorn status last year, when it raised $100 million in its maiden round of funding from WestBridge Capital and GSV Ventures with a valuation of more than $1.1 billion. The company reported standalone operating revenue of Rs 232.48 crore, a nine-fold increase from the previous year, and net profit of Rs 97.8 crore for FY22.
With the investment in Xylem Learning, PhysicsWallah is looking to further its presence in the Edtech market and strengthen its foothold in South India. The deal will help Xylem expand its reach and provide access to quality education to more students. The investment is a testament to the potential of the Edtech space in India and the opportunities that exist for companies to grow and innovate.
