PhysicsWallah in Negotiations to Acquire Drishti IAS by Vikas Divyakirti for ₹2,500 – ₹3,000 Crore.

PhysicsWallah, the edtech unicorn famous for its low-cost coaching programs, is in the final stages of buying Drishti IAS, one of the leaders in civil services exam preparation.

If the prospective deal priced between ₹2,500 – ₹3,000 crores is completed, it will mark one of the largest purchases in the Indian edtech industry in recent years.

The report added that the payout for the takeover will be paid over time and based on the performance of the business.

IPO plans and market expansion

The report comes as PhysicsWallah is gearing up for an IPO. The edtech unicorn based out of Noida was said to be looking to raise $500 million at a valuation of $5 billion during the public listing after they appointed three independent directors recently.

This acquisition will enable the Pandey-led startup to extend its offerings to include preparation for the UPSC and state commission examinations, highly sought after markets which are already served by many established coaching centers. This also supports the company’s strategy to expand into the offline education space where it plans to earn ₹1,000 crores in revenue by FY25.

Presence in the market of Drishti IAS

Drishti IAS began operations in the year 1996 in Mukherjee Nagar, and under the leadership of Vikas Divyakirti, it expanded to become the mammoth institute of civil services exam coaching that it is today. The 2024 fiscal year (FY24) revenue for Drishti Mukherjee Nagar center stood at 405 crore while profit was at 90 crore. The center in Delhi itself accounted for 58% of total revenue, while other locations in Prayagraj, Jaipur, and Karol Bagh also pitched in.

While asked about this report, Drishti IAS CEO Vivek Tiwari said these estimations shouldn’t be taken seriously and that they were inaccurate.

In addition to diversifying the company’s JEE and NEET coaching services, the acquisition would also strengthen its offline presence for PhysicsWallah, making it a leader in multiple categories of examinations.

Financial and operational growth problems for PhysicsWallah

The YouTube channel turned learning app owned by Alakh Pandey is now a fully-fledged hybrid edtech startup called PhysicsWallah which is valued at $2.8 billion after a September Series B round of 210 million dollars which is a huge milestone. The company now has its own branded offline centers, offering recorded and live lectures as well as test series.

PhysicWallah has received over $300 million in funding up to this point.

In FY24, the revenue from their operations surged to Rs 1,940 crore, up from Rs 744 crore in FY23. Nevertheless, their losses also increased 13 times to a whopping Rs 1,131 crore in FY24, compared to Rs 84 crore in FY23, because the company significantly increased its investments in technology, marketing, as well as expansion into new locations.

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