Daybreak - How Physicswallah avoided the typical startup conveyor belt

Episode Date: December 3, 2025

Physicswallah grew with almost no funding kept most of its ownership and built a huge following around its founder Alakh Pandey. Then it shifted gears and started buying companies expanding offline and spending more to grow faster. The numbers changed the risks changed and the company itself changed. Investors still showed up for the IPO but the real question is what comes next.What happens when a company built on frugality and founder energy suddenly tries to scale like a giant?Take this survey to share your best AI project.Daybreak is produced from the newsroom of The Ken, India’s first subscriber-only business news platform. Subscribe for more exclusive, deeply-reported, and analytical business stories.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganeshan, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get an alert as soon as we release our first episode, please follow Intermission on Spotify and Apple Podcasts or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. You know, there is a moment in every big business story

when the numbers stop becoming the most interesting part. Sometimes it happens a little late. But with physics walla, it happened almost immediately. Let's go back to 2022. Early stage investor Sanjay Swami took one look at the company's first institutional fundraise, which was $100 million at a nearly unicorn valuation and concluded, almost casually, it was not in a strike zone.

Oh, you could say polite pass. Nothing really dramatic. But three years later, that line feels like the one neat clue to a mystery that nobody realized they were watching unfold. Because that same company, PhysicsWala, made a pretty strong debut in the public markets a few weeks ago. It was at a valuation of over $3 billion, and that is the kind of number that gets headlines, sure, but the real story lies under the surface. And it sits on the fact that even as the IPO window opened, founders Alakpande and Pratik Bube still owned more than 80% of the company. Even after the offer for sale, they would still hold more than 70%.

Now, in India's consumer internet world, that level of founder control is almost unheard of. For example, Zomato's Dipinder Goel had 5.5% at listing. Swiggy's Sriharsha Majeti had around 5%. Petyam's Vijayshaker Sharma and Len Scott's Piyush Bansell were under 10%. Most founders had to be gifted shares backed by investors just to keep some author. But physics Walla did not look like any of them, not on paper, not in ownership and not in trajectory. And the strange thing is, this was not because of some master plan. It was the byproduct of a completely different choice, raising very little money, very late at very high

valuations, a decision that screened out the entire early stage venture capital world. And then physics Walla stepped into the public markets with a capital structure so unusual that it is both its greatest brag and also its biggest vulnerability. So here is the real question that we're going to ask today. What happens when a frugal, founder-led company suddenly tries to scale like the big guys? Welcome to Daybreak, a business podcast from the Ken. I'm your host, Nick Dar Sharma, and I Don't Chase the New Cycle. Instead, every day of the week, my colleague Rachel Varghees and I will come to you with one business story that is worth understanding and worth your time. Today is Thursday, the 4th of December.

Understand what Physics Walla took to the public markets, you have to go back to how it avoided the typical startup conveyor belt. Most Indian unicorns get there through four to six rounds of funding, dozens of investor meetings and years of dilution. Physics Walla became a unicorn in its very first institutional round. Westbridge wrote a Series A check priced as if several rounds had already happened. Early stage funds could not touch it. The valuation alone ruled them out. Other investors hesitated for different reasons. A Mumbai-based VC later admitted that they were not sure that the founders had the credentials

to take the company forward. Pandey had dropped out of a tier two engineering college. and in AirTech, pedigree, which is still an unspoken currency, still mattered. So, Physics Walla skipped the mould entirely. By 2023, when Baiju collapsed and EdTech turned toxic, physics Walla had already crossed the toughest markers. Profitability in the financial year 2022, a growing subscriber base, offline presence, and a brand tied directly to Pandey's charisma.

Crucially, it never needed a second check. from a new investor. So when late stage capital froze, Physics Walla did not really feel it. Instead, it leaned on the same investors, mostly Westbridge, later Lightspeed, who were already on board, no new dilution,

no complicated structures, no frantic fundraising. And that is how Physics Waller reached its IPO with 80 plus percent founder ownership before listing, minimal participation from the broader VC ecosystem, and no reliance on secondary sales or pro-rata gymnastics. It did raise money just not in the way that most startups do. It raised late at high prices from a very small circle of investors.

But now comes the twist. The strategy that physics walla is pivoting to demands something very different. To find out, stay tuned for the next segment. Hi, I'm Rachel, the co-host of Daybreak. I'm pausing this episode to ask you something very quickly. What's the coolest thing you've made using AI? And what are the prompts that helped you get there? Why do we ask?

Well, let's be honest. There's a learning curve with AI and most of us are still figuring it out. So, we are running a short survey to ask you to share your tried and tested hacks. You share your cool project, you share your prompts, and you get a chance to be featured in one of our episodes. You also get to hear from others like. you, all the experimental, efficient folks out there who are using AI to make something new. The link is in the show notes. It will take you just five minutes. We can't wait to hear from you.

Now, back to the episode. For years, physics walla looked nothing like a soon-to-be public air tech company. It was almost like a monk in its operations. No performance marketing, no big sales force, almost no paid advertising. Former executive Umang Vyars recalled to my colleague the Ken reporter Suprit Anupam of the company having only 50 to 60 employees as late as 2021. Two years later, it had nearly 10,000. And the financials, too, tell the story very clearly. The financial year 2022 saw a revenue of 234 crores and a profit of 100 crore rupees. And two years later, revenue jumped to 2,000 crore rupees, but losses also hit nearly 1,000

crore rupees. The tidy business that scaled organically through YouTube, any EAT courses, priced around 1,000 rupees only and teacher-led traction had transformed into something sprawling. The shift began with high-ticket programs at the Physics Walla Institute of Innovation, priced at 15 lakh rupees and up. Students complained about navigating dual programs and unclear equivalences. Yet, the other founder, Boob, maintained that over 93% of paid users still paid only $4,000. A brand, once proud of zero marketing, was suddenly spending 14% of revenue on ads. Boob says that this is seasonal, and he insists that annual spending stays under 10%. But the bigger shift is acquisitions and lots of them.

Offline coaching centers, regional test prep companies, a Middle East operator, some with negative net worth, like Xylem, Knowledge Planet and Utkarsh classes. From the money raised in the IPO, Physics Walla wants to spend more than 700 crore on more acquisitions and 1,000 crores for new offline centres. And one deal, Knowledge Planet, has already escalated to arbitration in Singapore. Now, in a sector that is shrinking after Bayju's Anacademy, Fiji and even Alan pulled back, Going aggressively offline is kind of risky. Physicswala's own filings acknowledge integration risks.

And then there is also the final layer, which is the personality problem. Physicswala is not just a company. It is Alak Pandey's persona at industrial scale. Students describe the brand as emotion. They quote his jokes, his songs, his philosophy as a part of their learning. Former executives say that the marketing runs on Bhoqal, which is a Hindi word for swagger. Even the viral SUV ad in Gulmarg, which triggered an FIR, was defended internally as necessary

for maintaining his aura. Now, this connection is powerful, but it is also a single point of failure. If a new charismatic teacher goes viral, something that happens regularly in test prep, by the way, we must remember that student loyalty is portable. Pandey once wanted to be an actor. now that theatrically drives engagement. But it also means that the company's fortunes are tied to one individual just as it enters its most capital-heavy phase.

Physics Walla's co-founder, Boob insists that the company is now culture-led, with a stronger SEO for the brand rather than the founder. Investors, for now, seem convinced. So the next few years will actually test whether the market bought into a sustainable business or a personality that the business happens to orbit around. Daybreak is produced from the newsroom of the Ken, India's first subscriber-focused business news platform. What you're listening to is just a small sample of a subscriber-only offerings

and a full subscription offers daily, long-form feature stories, newsletters and a whole bunch of premium podcasts. To subscribe, head to the Ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted and produced by my colleague Snitha Sharma and edited by Rajiv Sien.