BlackRock has once again cut the value of its stake in Byju’s, reducing the implied valuation of the Indian startup to around $1 billion from $22 billion in early 2022, according to disclosures made by the asset manager.
In late October last year, BlackRock said it valued Byju shares at about $209.6 each, from a high of $4,660 in 2022, implying a valuation of $990 million. The asset manager, like other mutual fund investors, makes multiple disclosures about its portfolio in a year, but does not explain its reasoning behind any valuation adjustments. Its new valuation adjustment has not been previously reported.
BlackRock, which owns less than 1 percent of Byju’s, did not immediately respond to a request for comment on Thursday. Byju’s declined to comment.
This isn’t the first time BlackRock has cut the value of its stake in Byju’s — and BlackRock isn’t the only investor to have seriously downgraded how it values Byju’s, but the new adjustment is by far the most drastic. Prosus, which owns about 9 percent of Byju’s, said late last year that it valued Byju’s at “less than $3 billion.” At $22 billion, Byju’s ranks as India’s most valuable startup.
The valuation downgrade is a surprising reversal of fortunes for Byju’s, once the poster child of the Indian startup ecosystem. The startup, which spent more than $2.5 billion in 2021 and 2022 acquiring more than half a dozen companies worldwide, was once valued at $50 billion by marquee investment bankers, TechCrunch previously reported.
Byju’s has been backed by over a dozen movers and shakers in the industry, from Peak XV Partners to Lightspeed, UBS and the Chan Zuckerberg Initiative. The startup, which gained initial popularity in India because its teachers used intuitive ways — tackling complex concepts using real-life objects like pizza and cake — has raised more than $5 billion in equity and debt over the past decade.
Byju’s was preparing to go public in early 2022 through a SPAC deal that would have valued the company at up to $40 billion. But Russia’s invasion of Ukraine in February sent markets tumbling, forcing Byju’s to put its IPO plans on hold, according to a source familiar with the matter. As market conditions worsened, so did the business outlook for Byju’s. The company began to face increasing pressure from investors to address issues it had previously left unresolved.
Byju’s today is reeling from a series of challenges: It is struggling to raise capital, make payroll and pay off debt that runs into the billions. It missed its revenue target for the fiscal year ending March 2022, the startup revealed in a much-delayed filing last month.
Byju CFO Ajay Goel left the startup in less than seven months to return to Vedanta in late October, following high-profile and abrupt departures of auditor Deloitte and three of Byju’s key board members in June. Prosus publicly criticized the Bengaluru-based startup in July for not growing sufficiently and for ignoring the investor’s advice and recommendations despite repeated attempts.
