Physics Wallah is in a planning stage to multiply Offline Coaching Centres
The founder & CEO of Ed-tech startup Physics Wallah, Alakh Pandey said that they are planning to open as many offline centres as they can by FY25, even if it erodes their profit.
They are very much aggressive about their step, of constructing offline centres was not affected by their sharp decrease of profit percentage to 
16 crore in FY23 from 98 crore in the previous year.
16 crore in FY23 from 98 crore in the previous year.
During 2022, Physics Wallah was valued $1 billion after a funding round. Currently, the company is operating 130 offline coaching centres in 105 cities, of which 55 were opened during the new fiscal year. By the next fiscal year, they are planning to open another 50 offline centres.
Alakh Pandey said, “Offline centres are capex-heavy. To turn a centre profitable, it takes three years. I don't want to wait too long and open offline centres slowly. Our brand is strong and the student pool is strong, so I want to go across India and open as many offline centres as we can right now. For that, we have to take a hit in the profit.”
The edtech startups which are operating in the segment of K-12 and test preparation such as Physics Wallah, Unacademy and Byju’s have decided to expand their operation in offline sectors because, the popularity of online educational platforms are decreasing after the disappearance of Covid, and demand of offline educational centres are increasing. So, these ed-tech giants are turning their attention towards offline segment.
Alakh Pandey said, the offline business at Physics Wallah now contributes 40% of total revenue although it accounts for only 5% of its student base. The company is eyeing on increasing their revenue share towards 45%. He also said that, Physics Wallah is trying to focus on offline market instead of thinking about profitability.
Alakh Pandey further added, “We are correcting the average revenue per user (ARPU) as well as offline, we are correcting the capex costs, we are learning a lot here. Whatever earnings we are making online, we are pouring it into offline scaling.”
According to Pandey, for Physics Wallah, the ARPU at offline coaching centres now stands at 50,000, which the company is trying to push to 65,000. ARPU on the online side rests at Rs 3,500.
50,000, which the company is trying to push to 65,000. ARPU on the online side rests at Rs 3,500.
Pandey clarified these are only for the standalone business of Physics Wallah. Its subsidiaries include iNeuron, PW Skills, PW Institute of Innovation and Xylem Learning.
The expansion of offline sector started showing up from FY23 and provisioning towards certain non-cash expenses and that led to a sevenfold jump in total expenses. The expenses including one-time costs and non-cash expenses, came in at 777 crore compared with 103 crore in the previous year.
777 crore compared with 103 crore in the previous year.
The revenue from operation has risen threefold to 772 crore in FY23 on a standalone basis, again attributable to the offline expansion.
772 crore in FY23 on a standalone basis, again attributable to the offline expansion.
Until today,the company employs 2,800 teachers, of which 400 only teach online. The remaining 2,400 teachers teach offline. The company had begun to speed up its offline coaching centre network with 30 new centres in 2022, the same year that it became a unicorn after raising $100 million in a maiden funding round from WestBridge Capital and GSV Ventures, among others.
