The Billion-Dollar Company Disrupting the Indian Test Prep Market

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Good morning! It's Friday, July 7th - In today’s post, we are going to break down an Indian ed-tech start-up that acquired a billion-dollar valuation in just two years. Let’s dig into it!

THE FEATURE

The Billion-Dollar Company Disrupting the Indian Test Prep Market

Alakh Pandey came from a small impoverished village in India where he began tutoring students after school for 200 INR ($2.5) a month.

From these humble beginnings, Pandey created Physics Wallah– India’s only profitable ed-tech startup that recently raised $100M in its first round of funding at a $1.1B valuation.

What’s the Business?

In his early 20s, Pandey dropped out of college to pursue his passion for teaching at a coaching institute in Kanpur. His unique teaching style inspired his colleagues and his students who encouraged him to start a YouTube channel.

In 2016, Pandey put all his focus into his YouTube channel and grew rapidly by catering to an underserved community of students. The Indian YouTube education category was oversaturated with content on how to pass the JEE and NEET standardized exams. Pandey quickly amassed tens of thousands of subscribers by being one of the few YouTubers to tutor high school freshmen and sophomores for the ICSE exam.

When the COVID-19 pandemic hit, Pandey’s loyal fan base relentlessly encouraged him to expand his content and create an application that could serve as an all-in-one virtual education platform. By listening to his community, Pandey’s Physics Wallah skyrocketed into prominence. Pandey’s YouTube channel has grown to 10.7M subscribers and his application has 10M+ downloads with over 600,000 daily users.

Within just two years, Pandey transformed Physics Wallah from a YouTube channel with a few thousand subscribers into one of the biggest education platforms in India with 1,900 employees.

The business model of Physics Wallah centers around providing high-quality educational content for free while offering additional premium content for a modest fee. By collecting revenue from YouTube ads, sponsorships, premium content, and tutoring sessions, Physics Wallah is expected to generate ~$80M this year.

How They Win

Audience first and product second

While advertising can work, the best form of marketing comes from grassroots movements led by satisfied consumers. Pandey quickly grew a die-hard fan base through his impassioned lessons filled with storytelling and life lessons. Students affectionately referred to him as the EdTech Guru that helped them through school and encouraged them to be successful in life.

It was only after forming a community of millions of young fans that Pandey began offering premium content through his app. By getting consumers hooked on his teaching style and free educational content, many were more than happy to pay for additional material.

Undersell the competition

Before Physics Wallah disrupted the test prep market in India, Byju and Unacademy were the most prominent tutoring services and charged approximately $300+ for their courses. Conversely, Physics Wallah only charges $12 for its courses.

Physics Wallah’s various courses generate $42M a year compared to Unacademy’s $48M. However, Physics Wallah solely relies on word-of-mouth advertising from its loyal fan base to grow its business while Unacademy spends $50M annually on marketing.

Why It Matters

Alakh Pandey is a perfect example of how to harness your talent and turn it into a market solution.

With a passion for impactful teaching and storytelling, Pandey became India’s favorite educator and was able to provide an affordable alternative to standardized test prep for millions of students.