PhysicsWallah Nears Major Acquisition of Drishti IAS Institute

PhysicsWallah, a prominent edtech unicorn, is reportedly on the verge of acquiring Drishti IAS Institute, an offline coaching firm, as informed by three knowledgeable sources. This acquisition could potentially represent the most significant merger in the edtech sector in recent years.

According to a source who preferred to remain anonymous, PhysicsWallah is investing approximately Rs 2,500–3,000 crore to secure the UPSC and state commissions preparatory platform. The two entities have been in discussions since January of this year, and the agreement is expected to be concluded shortly.

This development coincides with PhysicsWallah’s plans for its initial public offering (IPO). The company, based in Noida, has recently appointed three independent directors and is targeting to raise $500 million at a valuation of $5 billion through this public listing.

As mentioned by sources, the financial aspects of the deal will be executed in multiple phases, with payments linked to future performance benchmarks.

Vivek Tiwari, CEO of Drishti IAS, conveyed, “Although we have been meeting several people from different organisations, including IPO bankers, private equity firms, and edtech founders, for our future plans, nothing has been finalised yet. The information being discussed is mere speculation and should not be taken seriously.”

Attempts to reach PhysicsWallah for comments did not receive a prompt reply.

Established 26 years ago, Drishti IAS is renowned for offering offline coaching designed to assist students in preparing for the Civil Services Examination (CSE), and it reported revenues of Rs 405 crore with a profit after tax (PAT) of Rs 90 crore in FY24.

Vikas Divyakirti founded the Mukherjee Nagar Institute, which significantly contributes to Drishti IAS’s revenue, generating 58% of its overall coaching income, followed by locations in Prayagraj, Jaipur, and Karol Bagh.

In comparison, PhysicsWallah has been operational for nine years and has developed into a comprehensive edtech platform providing live and recorded lectures, test series, study materials, and hybrid offline centres. So far, the firm has raised over $300 million, with a valuation of approximately $2.8 billion from a $210 million Series B funding round in September of last year.

For the financial year 2024, PhysicsWallah reported an operational revenue of Rs 1,940.4 crore, a significant increase from Rs 744.3 crore in FY23. However, the company has experienced a steep rise in losses, which jumped more than 13 times to Rs 1,131 crore in FY24, compared to Rs 84 crore in FY23.

This prospective acquisition aligns with PhysicsWallah’s strategy to enhance its offline coaching capabilities. The company, backed by Lightspeed and WestBridge, has stated intentions to exceed Rs 1,000 crore in offline revenue by the close of FY25.