Byju’s, the Indian edtech giant, has experienced a significant decline in its valuation, according to BlackRock, one of its investors. The company’s stake, once valued at $22 billion, is now estimated to be worth nothing, as disclosed in an SEC filing. This marks a dramatic downfall for Byju’s, which was previously considered India’s most valuable startup.
The troubles for Byju’s began last year when it struggled to meet its financial reporting deadlines and fell short of its revenue projections by over 50%. These challenges, combined with the sudden resignations of its auditor and board members, led to the derailment of a $1 billion fundraise deliberation. Prosus, one of Byju’s largest investors, publicly criticized the startup for disregarding their advice regularly.
Despite these setbacks, Byju’s managed to raise $200 million this year at a post-money valuation of around $250 million. However, this investment is currently being disputed by some of its largest investors. Given these ongoing issues, it is unsurprising that BlackRock has attributed a zero valuation to Byju’s. In fact, this is not the first time that BlackRock has marked down the company’s valuation. In October 2020, BlackRock reduced Byju’s valuation to approximately $1 billion.
HSBC, in a research note, also estimated that Prosus’ 10% stake in Byju’s has significantly decreased in value. In fact, the analysts at HSBC did not assign any value to Prosus’ stake at all. HSBC clarified that they were only assessing Prosus’ stake and refraining from assigning a value does not necessarily mean a zero valuation. However, the research note did use zero in the column for estimated value.
HSBC also mentioned that Prosus’ stakes in other startups like Meesho, Pharmeasy, ElasticRun, and Stack Overflow have also seen a decline in value. They applied a 50% discount to the latest funding round/acquisition price for these assets to account for the recent correction in similar edtech/SaaS companies’ public sector multiples.
Overall, the recent valuation adjustments by BlackRock and HSBC indicate a significant decline in Byju’s worth. The company’s governance issues, missed revenue projections, and disputes with investors have all contributed to its downfall. It remains to be seen how Byju’s will navigate these challenges and regain its position as a leading player in the Indian edtech market.
