Byju’s Valuation Plummets: From $22 Billion to Zero

Byju’s Valuation Plummets: From $22 Billion to Zero

In a shocking turn of events, BlackRock, one of the major investors in Indian edtech giant Byju's, has estimated that its stake in the company is now worth nothing. This significant write-down in valuation was disclosed in an SEC filing, making Byju's one of the most dramatic startup slides in recent memory.

Byju's, once the most valuable startup in India, has had a rough year. The company struggled to meet its financial reporting deadlines and fell short of its revenue projections by more than 50%. These issues, along with the sudden resignations of its auditor and board members, led to the derailment of a $1 billion fundraise deliberation.

Prosus, another major investor in Byju's, publicly criticized the startup for disregarding their advice. Amidst a funding crunch, Byju's managed to raise $200 million at a post-money valuation of about $250 million this year. However, this investment is now being legally disputed by some of its largest investors.

Given the challenges faced by Byju's, it is not surprising that BlackRock has assigned a zero valuation to the company. This is not the first time that BlackRock has marked down the valuation of Byju's. Last year, they had already reduced the valuation to about $1 billion.

HSBC, in a research note, also estimated that Prosus' 10% stake in Byju's has diminished to such an extent that they have not assigned any value to it. HSBC's research note also mentioned that Prosus' stake in other startups, such as Meesho, Pharmeasy, ElasticRun, and Stack Overflow, have also significantly decreased in value.

The current valuation adjustments by BlackRock and HSBC reflect the challenging circumstances faced by Byju's and the overall correction in the edtech and SaaS sectors. The note from HSBC states that a 50% discount has been applied to the last funding round or acquisition price for assets older than six months.

It is clear that Byju's is facing significant hurdles and its valuation has taken a severe hit. The company will need to address its governance issues and regain the trust of its investors to turn its fortunes around. Only time will tell if Byju's can recover from this setback and regain its previous valuation.