Connect with us

Published

on

Alakh Pandey (R), CEO of Physics Wallah, along with the company’s co-founder Prateek Maheshwari (L).

Physics Wallah

Indian education technology startup Physics Wallah announced on Friday that it had raised $210 million as it looks to expand its business, in part via acquisitions, amid troubles in the sector.

The funding, led by Hornbill Capital, and involving Lightspeed Venture Partners, GSV and WestBridge, values the company at $2.8 billion, a significant increase from its last valuation of $1.1 billion.

Physics Wallah, founded in 2020, is one of India’s many education technology, or ed-tech firms, that offers free and paid-for courses for various competitive examinations in India. The company aims to differentiate itself by offering courses that on average cost less than $50, in order to be accessible to more kids in poorer parts of the country.

“We are not built for 1% of the country or 1% of the world, we are built for the remaining 99%, those who cannot go to these fancy coaching classes … now we enable different kinds of students,” Alakh Pandey, CEO of Physics Wallah, told CNBC in an interview.

The company runs on a freemium business model, hosting courses for free on YouTube. For those students who want more features such as homework and tests, there is a paid offering.

The company said its revenue grew 250% year-on-year in the fiscal year ended March 2024 and Pandey said he expects the “highest absolute” EBITDA in the current fiscal year. Earnings before interest, taxes, depreciation, and amortization, or EBITDA, is one measure of profitability used by companies.

Pandey said the company is open to acquisitions provided it gives them access to new content and users.

“Consolidation, we are open to it if it’s based on different geography that we cannot serve to, and if it caters to content and community first,” Pandey said.

The CEO pointed to the equity investments it has already made. Last year, Physics Wallah brought a 50% stake in Xylem Learning, an ed-tech company headquartered in Kerala in south India.

India ed-tech issues

Pandey and his co-founder Prateek Maheshwari said that the company is focused on some key trends including the push for hybrid — both online and in physical classrooms — and broader internet penetration across villages, towns and smaller cities in India. All of this helps children from less-privileged backgrounds get access to education.

The ed-tech boom in India began during the Covid pandemic when several companies looked to expand aggressively.

But that expansion also led to some high-profile collapses in the sector, including ed-tech firm Byju — once valued at $22 billion — which has all but collapsed and is facing multiple insolvency proceedings in India. Its fall has been attributed to factors including aggressive acquisitions, high spend on marketing and mismanagement.

Discussing some of the failures in the ed-tech sector in India, Pandey said his company is focused on the content it offers and the outcomes for students.

“If you see interviews or even read the headlines of previous actors that you’re talking about, all they talk about is the crazy valuation they have, the funds they have raised how much money they have made,” Pandey told CNBC.

“Education is different thing. It’s not like any other startup that you can grow and talk about crazy valuation … at heart you have to accept that you are actually working to change the life of students.”

Maheshwari, who also spoke to CNBC, said that despite the failures, the market is still growing.

“I don’t believe the market has shrunk. A couple of players have struggled to perform post-Covid … but the learners are increasing year-on-year,” Maheshwari said.

Speaking about Physics Wallah’s future, Pandey said an initial public offering will happen, but wouldn’t be drawn on a timeline.

“An IPO is something that we will do. We want to have a strong governance in the company, we are working on that, forming a board of independent directors … it’s not that important for us when the IPO will happen, we are running the company like a public company,” Pandey said.

Continue Reading

Technology

Europe unveils plan to become ‘AI continent’ with simpler rules, more infrastructure

Published

on

By

Europe unveils plan to become 'AI continent' with simpler rules, more infrastructure

The European Union is so far the only jurisdiction globally to drive forward comprehensive rules for artificial intelligence with its AI Act.

Jaque Silva | Nurphoto | Getty Images

The European Union on Wednesday presented a plan to boost its artificial intelligence industry and help it compete more aggressively with the U.S. and China, following criticisms from technology firms that its regulations are too cumbersome.

In a press release, the European Commission, the executive body of the EU, outlined its so-called “AI Continent Action Plan,” which aims to “transform Europe’s strong traditional industries and its exceptional talent pool into powerful engines of AI innovation and acceleration.”

Among the ways Europe plans to bolster regional AI developments are a commitment to build a network of AI factories and “gigafactories” and create specialized labs designed to improve the access of startups to high-quality training data.

The EU defines these “factories” as large facilities that house state-of-the-art chips needed to train and develop the most advanced AI models.

The bloc will also create a new AI Act Service Desk to help regional firms comply with its landmark AI law.

“The AI Act raises citizens’ trust in technology and provides investors and entrepreneurs with the legal certainty they need to scale up and deploy AI throughout Europe,” the Commission said, adding the AI Act Service Desk will “serve as the central point of contact and hub for information and guidance” on the rules.

The plan bears similarities to the U.K.’s AI Action Plan announced earlier this year. Like the EU, Britain committed to expand domestic AI infrastructure to aid developers.

Hindering innovation?

The launch of the EU’s AI plan arrives as the bloc is facing criticisms from tech leaders that its rules on everything from AI to taxation hinder innovation and make it harder for startups to operate across the region.

The bloc’s landmark legislation known as the AI Act has proven particularly thorny for companies in the rapidly growing artificial intelligence industry.

The law regulates applications of AI based on the level of risk they pose to society — and in recent years it has been adapted to cover so-called “foundational” model makers such as OpenAI and French startup Mistral, much to the ire of some of the buzziest businesses in that space.

At a global AI summit in Paris earlier this year, OpenAI’s Chief Global Affairs Officer Chris Lehane told CNBC that European political and business leaders increasingly fear missing out on AI’s potential and want regulators to focus less on tackling risks associated with the technology.

“There’s almost this fork in the road, maybe even a tension right now between Europe at the EU level … and then some of the countries,” Lehane told CNBC’s Arjun Kharpal in February. “They’re looking to maybe go in a little bit of a different direction that actually wants to embrace the innovation.”

The U.S. administration has also been critical of Europe over its treatment of American tech giants and fast-growing AI startups.

At the Paris AI summit in February, U.S. Vice President JD Vance took aim at Europe’s regulatory approach to AI, stressing that “we need our European friends in particular to look to this new frontier with optimism rather than trepidation.”

“There is a real emphasis on easing the burden of regulation and removing barriers to innovation, which in part is likely to reflect some of the concerns that have been raised by the US government,” John Buyers, global head of AI at law firm Osborne Clarke, told CNBC over email.

“This isn’t only about the EU: If they are serious about eliminating legal uncertainties caused by interpretation of the EU’s AI Act, then this would be a real boost for AI developers and users in the UK and the US, as the AI Act applies to all AI used in the EU, regardless of where sourced.”

Continue Reading

Technology

Elon Musk ratchets up attacks on Navarro as Tesla shares slump for fourth day

Published

on

By

Elon Musk ratchets up attacks on Navarro as Tesla shares slump for fourth day

Elon Musk (L), and Peter Navarro (R).

Reuters

As Tesla shares plummeted for a fourth straight day, CEO Elon Musk let loose on President Donald Trump’s top trade advisor Peter Navarro.

Musk, the world’s richest person, started going after Navarro over the weekend, posting on X that a “PhD in econ from Harvard is a bad thing, not a good thing,” a reference to Navarro’s degree. Whatever subtlety remained at the beginning of the week has since vanished.

On Tuesday, Musk wrote that “Navarro is truly a moron,” noting that his comments about Tesla being a “car assembler,” as much are “demonstrably false.” Musk called Navarro “dumber than a sack of bricks,” before later apologizing to bricks. Musk also called Navarro “dangerously dumb.”

Musk’s attacks on Navarro represent the most public spat between members of President Trump’s inner circle since the term began in January, and show that the steep tariffs announced last week on more than 180 countries and territories don’t have universal approval in the administration.

When asked about the feud in a briefing on Tuesday, White House press secretary Karoline Leavitt said, “Look, these are obviously two individuals who have very different views on trade and on tariffs.”

“Boys will be boys, and we will let their public sparring continue,” she said.

For Musk, whose younger brother Kimbal — a restaurant owner, entrepreneur and Tesla board member — has joined in on the action, the name-calling appears to be tied to business conditions.

Tesla’s stock is down 22% in the past four trading sessions and 45% for the year. Tesla has lost more tha $585 billion in value since the calendar turned, equaling tens of billions of dollars in paper losses for Musk, who is also CEO of SpaceX and the owner of xAI and social network X.

Even before President Trump detailed his plan for widespread tariffs, he’d already placed a 25% tariff on vehicles not assembled in the U.S. Many analysts said Tesla could withstand those tariffs better than competitors because its vehicles sold in the U.S. are assembled domestically.

But the company’s production costs are poised to increase because of the tariffs on materials and parts from foreign suppliers. Canada and Mexico are among the leading sources of U.S. steel imports, and Canada is the nation’s largest supplier of aluminum, while China and Mexico are home to major suppliers of printed circuit boards to the automotive industry.

At a recent an event hosted by right-wing Italian Deputy Prime Minister Matteo Salvini, Musk said, “Both Europe and the United States should move, ideally, in my view, to a zero-tariff situation, effectively creating a free trade zone between Europe and North America.”

Musk, whose view on trade relations with Europe stands in stark contrast to the policies implemented by the president, has a vested interest in the region. Tesla has a large car factory outside of Berlin, and the European Commission previously turned to SpaceX for launches.

Even before the tariffs, Tesla’s business was faltering. Last week, the company reported a 13% year-over-year decline in first-quarter deliveries, missing analysts’ estimates. That report that landed days after Tesla’s stock price wrapped up its worst quarter since 2022.

Musk, who spent roughly $290 billion to help return Trump to the White House, is now leading the Department of Government Efficiency, or DOGE, which has slashed costs, eliminated regulations and cut tens of thousands of federal jobs. In the first quarter, Tesla was hit with waves of protests, boycotts and some criminal activity that targeted vehicles and facilities in response to Musk’s political rhetoric and his work in the White House.

WATCH: Brad Gerstner explains his Tesla position

Brad Gerstner explains his Tesla position

Continue Reading

Technology

Apple’s 4-day slide puts Microsoft back on top as most valuable company

Published

on

By

Apple's 4-day slide puts Microsoft back on top as most valuable company

Satya Nadella, CEO of Microsoft, laughs as he attends a session at the World Economic Forum in Davos, Switzerland, on Jan. 23, 2020.

Denis Balibouse | Reuters

Apple‘s 23% plunge over the past four trading sessions has again turned Microsoft into the world’s most valuable public company.

As of Tuesday’s close, Microsoft is worth $2.64 trillion, while Apple’s market cap stands at $2.59 trillion.

While the market broadly is getting hammered by President Donald Trump’s sweeping tariff plan, Apple is getting hit the hardest among tech’s megacap companies due to the iPhone maker’s reliance on China.

The Nasdaq is down 13% over the past four trading days, as President Trump’s decision to impose tariffs on imports from more than 100 countries has sparked fears of a recession brought on by rising prices. UBS analysts on Monday predicted that the price of the iPhone 16 Pro Max could jump as much as $350 in the U.S.

Both Apple and Microsoft, along with chipmaker Nvidia, were previously valued at upward of $3 trillion before the recent sell-off.

In January, Microsoft issued disappointing revenue guidance. Nevertheless, last week, as Jefferies analysts reduced their price targets on many software stocks, they wrote Microsoft was among the “companies who we view as more insulated” from tariff uncertainty.

Microsoft also had the highest market capitalization of any public company in early 2024, but Apple soon reclaimed the title.

Don’t miss these insights from CNBC PRO

Tech stocks struggle with intraday gains amid tariff uncertainty

Continue Reading

Trending