As Byju’s-burnt private investors turn cagey, edtech startups take IPO route

Professional learning provider Imarticus, B2B edtech platform Classplus, online higher education company Jaro Education, and full-stack edtech unicorn Physics Wallah are among those that have set the ball rolling for their public market debut. While some have already filed their offer documents, others are in discussions to finalize bankers for their initial public offerings (IPOs).

Physics Wallah, which appointed Axis Capital, Kotak Mahindra Capital, Goldman Sachs, and JP Morgan as bankers, is scheduled to file its draft red herring prospectus (DRHP) within the next month, three people aware of the development told Mint. The company plans to raise $300-$400 million, one of the three persons cited earlier said, all of whom spoke on the condition of anonymity.

Imarticus Learning is in advanced talks with investment banking firms IIFL, and Ambit to appoint them as bankers for its upcoming IPO next year, two people with knowledge of the development said. The $125-million skilling company plans to raise ₹800- ₹1,200 crore though the initial share sale, one of the people cited above added.

B2B edtech platform Classplus is in initial discussions with three to four bankers to figure out their path ahead as they consider a public listing over the next two years, two sources aware of the development told Mint. Physics Wallah, Imarticus Learning, Classplus, Ambit and IIFL did not immediately respond to a request for comment.

Also read | Indian edtech ecosystem to see further integration of traditional models: GSV Ventures

“The IPO market is open and attractive. When considering options—private equity or an IPO—an IPO is more attractive, at least for some founders I am speaking to,” Deborah Quazzo, managing partner of GSV Ventures, one of the most active edtech-focused venture capital firms, told Mint on the sidelines of the ASU GSV edtech summit in Gurugram, last week.

Mint earlier reported that study-abroad platform Leverage Edu, and upskilling unicorn upGrad are also considering a public listing in the next two to three years.

Meanwhile, the Ashwin Damera-led Eruditus is in the process of shifting its domicile from Singapore to India for a potential stock market listing. Jaro Education filed its draft papers on 3 October with plans to raise about ₹570 crore, multiple reports said.

Some others are bulking up their platforms to become more feasible for retail investors.

LEAD’s founder Sumeet Mehta told Mint that the company is not keen on raising another private funding round, except for potential secondary transactions closer to its public listing.

The company is targeting a listing in the next two to three years, or sooner if it bulks up to a revenue of ₹1,000 crores and achieves net profit. In FY24, LEAD’s revenue from operations grew 28.6% to ₹351 crore, from ₹273 crore in FY23. Mehta added that the company has also turned profitable on the Ebitda level. Ebitda stands for earnings before interest, taxes, depreciation, and amortization, and is a key measure of a company’s profitability.

Also read | When schools drop out: Why edtech LEAD is struggling to find followers

While market conditions appear favourable, questions remain about the sector’s ability to sustain long-term investor confidence. With Byju’s struggles casting a shadow, Physics Wallah’s IPO is being closely watched as a potential breakthrough, with others planning to follow.

However, industry leaders caution that going public requires financial discipline and sustainable growth—factors that many edtechs are still working to solidify before their market debuts.

Private’s no fun

A soonicorn edtech founder, in regular talks with bankers about a potential listing, explained that after recently achieving profitability, the company no longer needs private funding.

“In the US, a company can be large, unprofitable, and still go public if it’s growing fast and has strong potential. In contrast, the Indian market is currently only focusing on profitability, even if the companies are smaller,” Michael Moe, the founder of GSV Ventures, told Mint.

With funding drying up over the past three years, founders prioritized profitability over growth. While some companies have stabilized, valuation mismatches in private markets are pushing them toward public listings.

Despite recent corrections, strong market activity and higher valuations over the last funding round are attracting tech firms to the bourses. In edtech, the IPO queue is longer, as private funding remains limited to top players, with investors continuing to take a cautious approach.

Also read | India’s education-tech bubble goes pop

Is the public market ready for an edtech listing?

In the recent tech IPOs, not a single edtech has debuted on the stock exchanges.

Venture-backed education companies that once planned to go public—such as Byju’s and Aakash—are now stuck in legal battles, stalling any immediate listing plans. Outside of a few legacy players, the sector’s models remain untested.

The key question: Does the public market have the risk appetite for edtech?

Ronnie Screwvala, executive chairperson at upGrad, said that while the public markets have an appetite for newer offerings on the back of innovation in the sector, it is important for founders to enter the game with the right intentions. 


“But the first question is scale, and the second is, especially in B2C companies, if your cost for acquiring a customer is high and if you’re raising funding to acquire customers, that’s flawed,” he added.

Many upcoming IPOs in the edtech sector feature companies valued below $1 billion, a stark contrast to Swiggy’s $10.7 billion valuation before its public debut.

“Because you are valued on growth, you’ll be valued for solving big problems in a big market like India. But if you can’t scale, that’s a problem,” said Screwvala.

Also read | Upskilling 2.0: Edtechs partner with top universities for joint degrees amid sluggish hiring trends

For bankers, according to the soonicorn founder quoted above, the top criteria is a unique model, consistent performance in terms of profitability and revenue growth with less fluctuations, and a core tech-driven approach—not just an education company in disguise.

A soonicorn is a startup that is soon expected to be a unicorn, or a company valued upwards of $1 billion.

Still, skepticism runs high. Burnt by Byju’s downfall, bankers remain extremely cautious, “checking everything twice,” said the founder. “Investors are looking for a story to sell edtech again.”

Hopes on Physics Wallah

Amid intense competition, the industry is rallying behind Physics Wallah’s upcoming IPO. While some of this support is camaraderie, the sector is in dire need of a success story.

“If this doesn’t work out, we might as well put a big lock on the sector!” quipped another edtech founder that Mint spoke to.

The past few years have seen the downfall of major players like Byju’s, global setbacks such as Chegg’s struggles, and the earlier collapse of Educomp, which has resulted in investor skepticism.

“Education is a big need but a challenging space to monetize. The challenge is finding a sustainable business model, as seen with companies like Byju’s, which have struggled,” said Sandeep Murthy, founder and managing director of Lightbox India, in an interview last month.

While he remains on the lookout for fundable opportunities to invest in the sector, he is hesitant about edtech IPOs delivering strong, lasting returns.

Edtechs clean-up for bourses

For Physics Wallah—and others eyeing a public listing—a long to-do list remains. Startups must undergo audits, financial restructuring, and other structural changes. In November, Physics Wallah appointed Amit Sachdeva as CFO to strengthen its financial preparedness.

Investors and operators are assessing their IPO-readiness. “Founders are increasingly focused on performance, financial stability, and predictability,” said Quazzo of GSV Ventures. “In India, where going private isn’t an option like in the U.S., you need to be truly ready.”

Meanwhile, Screwvala cautioned against the pressures of public markets. “If you’re building for the long term, don’t let quarterly expectations derail you. Think thrice, not just twice, before taking the leap,” he warned.