The spectacular stock market listing of PhysicsWallah has ignited fresh optimism across India's education technology sector, potentially ending a prolonged funding winter that has starved online learning startups of capital for nearly three years. The Westbridge Capital-backed company made a stunning debut on Indian exchanges, opening at a 33% premium to its IPO price and closing with a valuation of approximately ₹44,000 crore ($5 billion).
Market Validation for Edtech Model
According to investors and industry experts, PhysicsWallah's successful public offering serves as crucial validation for the fundamental edtech business model. Siddharth Pai, founding partner at 3one4 Capital, emphasized that the company's performance demonstrates that previous failures in the sector were company-specific issues rather than flaws in the broader edtech thesis.
"Each of them had different reasons why they tanked," Pai noted, referring to the well-publicized struggles at Byju's and Unacademy. He attributed Byju's collapse to governance problems and over-extension, while Unacademy suffered from COVID-era overvaluation and losing momentum once physical schools reopened.
In contrast, PhysicsWallah proved that an edtech company could achieve student acquisition at low costs, maintain profitability before securing large investments, and grow without depending on unsustainable marketing expenditures.
Funding Landscape Transformation
The edtech funding environment has undergone dramatic changes since the pandemic-induced euphoria. According to Tracxn data, equity funding for edtech startups has plummeted from $4.15 billion across 378 deals in 2021 to just $141 million through 49 deals in 2025 - representing a staggering 97% decline.
PhysicsWallah's IPO attracted strong investor interest, with the offering being subscribed 1.92 times overall. Qualified institutional buyers demonstrated particular enthusiasm, bidding 2.86 times their allocated quota, while retail investors subscribed 1.14 times. However, the non-institutional investor category saw weaker demand, covering only about half of their available quota.
Valuation Debate and Hybrid Model
Despite having a hybrid business model with nearly equal revenue contribution from online and offline operations, PhysicsWallah commands a valuation multiple typically reserved for pure technology companies. The company's IPO values it at more than 10 times its FY25 restated revenue of approximately ₹2,887 crore, representing a significant premium to its net asset value.
Pradyumna Nag, partner at Prequate Advisory, highlighted the valuation challenge: "PhysicsWallah is effectively being valued at around 10 times revenue, which is a pure tech multiple, but the business is now a 'fractured hybrid' where half the growth is expected from offline centres." He noted that traditional offline education players in India have historically struggled to sustain valuations beyond three to five times revenue.
The company's revenue distribution reveals interesting dynamics - while digital courses contribute 48-49% of revenue, physical centers generate about 47%, with offline centers commanding an average revenue per user exceeding ₹40,000 compared to under ₹4,000 for online offerings.
Setting New Industry Benchmarks
Industry founders and investors are already treating PhysicsWallah's public market performance as a crucial reference point for evaluating education businesses that blend online scale with physical centers. A founder of an upskilling-focused edtech startup, speaking anonymously, revealed that venture capital and private equity funds now consistently reference PhysicsWallah's debut during funding discussions.
Mukul Rustagi, CEO and co-founder of Classplus, emphasized the significance of public market pricing: "PhysicsWallah's IPO is a very clear benchmark. Private investors will recalibrate how they identify, evaluate and value edtech investments based on how this stock trades."
He added that over the next one to two years, PhysicsWallah's stock performance will determine how education companies are valued, how bullish private markets become on the segment, and how liberal investors are willing to be with valuation multiples.
Long-term Sustainability Concerns
While the initial market response has been overwhelmingly positive, long-term success depends on the company's ability to provide realistic guidance and consistently meet performance targets. Pai of 3one4 Capital warned that "the thing that will hurt them over in the long run is if they end up actually giving exuberant guidance and miss it consistently."
The Indian edtech sector has already experienced the consequences of irrational exuberance during the COVID boom between 2020 and 2022. Byju's raised over $3 billion during that period, reaching a peak valuation of $22 billion, while Unacademy secured $440 million at a $3.44 billion valuation in August 2021.
Three years later, the landscape has transformed dramatically. Byju's is now undergoing insolvency proceedings, while Unacademy is in talks to sell its core test preparation business to rival UpGrad for just $300-400 million - a fraction of its peak valuation.
The funding slowdown has affected both early and late-stage investments. Seed-to-Series A rounds collapsed from $597 million across 338 deals in 2021 to just $38 million through 39 deals in 2025, while Series B and beyond dropped from $3.5 billion across 40 deals to $103 million across 10 deals during the same period.
As PhysicsWallah navigates its new status as a publicly traded company, its performance will not only determine its own future but potentially reshape the entire edtech investment landscape in India for years to come.
