Lightspeed Venture Partners has sold its entire stake in PhysicsWallah (PW) for Rs 549.73 crore, less than two years after investing in the edtech company, raising questions about how long venture capital investors are willing to wait for India's education technology sector to mature.
The sale, completed on Wednesday, covered 1.61% of PW through a block deal at Rs 117 a share, below the previous close of about Rs 121. Lightspeed's exit came as soon as the IPO lock-in period expired, turning what had been presented as a carefully researched bet into a relatively quick realisation of its investment.
The timing is notable because Lightspeed had invested in PW after its earlier backing of Byju's ended badly. Around PW's IPO, Shreyam Desai, a senior Lightspeed executive, described the investment as a highly researched bet after the firm had "burned fingers on Byju's" and said it was a long-term investment.
The exit now comes less than two years after Lightspeed invested in PW.
A Short Hold
Lightspeed invested in PW in September 2024, leading a $210 million Series B round alongside Hornbill Capital at a valuation of $2.8 billion. It sold its entire holding in August 2026.
That gives the investment a holding period of less than two years. Bain & Company's 2026 figures put the average global buyout holding period at about seven years, up from five to six years in 2021, mainly because of a backlog of about 32,000 unsold companies.
PW's public-market debut had initially appeared to validate the investment. The company listed in mid-November 2025 at Rs 156, 44% above its Rs 109 issue price, after touching Rs 161.99. Its market value reached about Rs 44,800 crore. The Rs 3,480 crore IPO was subscribed 1.81 times.
Lightspeed's decision to exit soon after the lock-in ended therefore stands in contrast to the long-term investment case outlined around the listing.
Edtech Fallout
PW was the first Indian edtech company to list after the collapse of Byju's and layoffs at Unacademy. Its listing was seen as evidence that the sector could still produce a viable public company.
Lightspeed had already seen the other side of the edtech cycle. It was an early backer of Byju's, investing in the company's 2016 funding round.
Byju's later became India's most valuable startup, reaching a valuation of nearly $22 billion before its collapse. A $1.2 billion dispute with US lenders, auditor exits, board departures, an Enforcement Directorate case alleging $1.1 billion in foreign-exchange violations, insolvency proceedings at the National Company Law Tribunal and a February 2025 Delaware bankruptcy ruling that found $533 million in fraudulent transfers followed.
Founder Byju Raveendran was sentenced to six months in jail in Singapore in May.
Unacademy faced a different outcome but also saw its valuation fall sharply. In March 2026, co-founder Gaurav Munjal confirmed a term sheet for rival upGrad to acquire the company in an all-stock transaction. The deal would fold Unacademy's parent into upGrad Education after clearance from the Competition Commission in July.
The transaction followed a fall in Unacademy's valuation to below $500 million from a peak of $3.5 billion in 2021. The company said it still had more than $100 million in cash.
Of the three companies that came to define India's edtech boom, Byju's ended up in insolvency, Unacademy was set to be absorbed by a rival and PW reached the public market independently.
Lightspeed invested in PW while those developments were unfolding.
Goldman's Role
Goldman Sachs' position in the PW trade adds another layer to the block deal.
Goldman Sachs (India) Securities was one of four book-running lead managers for PW's IPO. Goldman entities were also among the largest buyers in Wednesday's transaction, with five entities purchasing shares.
Some of the Goldman entities on the buy side are likely to be issuers of participatory notes, or P-notes, as are likely Citigroup Global Markets Mauritius, Morgan Stanley Asia Singapore and Societe Generale.
ICICI Prudential Mutual Fund was the largest outright buyer, purchasing 2.2 crore shares worth Rs 258.98 crore.
PW's Numbers
PW's financial performance has changed since its listing.
Revenue in the first quarter of FY27 rose 24% from a year earlier to Rs 1,054 crore. Its consolidated net loss narrowed to Rs 77.6 crore from Rs 120.5 crore a year earlier.
EBITDA turned positive, although it fell to Rs 56.9 crore from Rs 76.3 crore in the previous quarter.
PW has also expanded beyond its core offering. It has been increasing its stake in Sarrthi IAS, a UPSC coaching brand, and has acquired stakes in Utkarsh Classes & Edutech and Xylem Learning.
The stock has nevertheless fallen 30% over the past six months.
Alakh Pandey started PW in 2016 as a free Hindi-language physics channel on YouTube.
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Another Exit
The PW sale also follows Lightspeed's move to explore a reduction in its Oyo holding.
In January 2025, Lightspeed opened talks to sell part of its Oyo stake alongside Peak XV Partners. The hospitality startup is preparing for another attempt at an IPO and is valued at about $3.9 billion, below its $9 billion peak valuation in 2021.
For Lightspeed, the PW investment came after its experience with Byju's, followed by an exit less than two years later when the lock-in period ended.
That sequence puts the focus less on whether PW can revive the broader edtech investment story and more on how venture investors are managing liquidity in a sector that has already seen one major collapse and another large company absorbed by a rival.
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