SUMMARY
BlackRock has marked down the value of its shares in BYJU’S to $2,855 per share from $4,660 per unit in April 2022
The $11.5 Bn valuation is in vast contrast to the $22 Bn valuation at which BYJU’S raised $250 Mn funding in October last year
The development has come close on the heels of Swiggy getting a 25% valuation cut from its US-based investor Invesco, which valued the foodtech major at $10.7 Bn in January 2022
In what appears to be fresh trouble brewing for BYJU’S, US-based asset manager BlackRock has reportedly slashed the valuation of the edtech major by nearly 50% to $11.5 Bn. This is a sharp markdown from the $22 Bn at which the edtech decacorn was last valued in 2022.
In its assessment, BlackRock, which owns less than 1% stake in BYJU’S, is said to have marked down the value of its shares in BYJU’S to $2,855 per share from $4,660 per unit in April 2022.
The disclosures were part of filings seen by TechCrunch and were first reported by The Arc. BYJU’S could not be reached for comment.
The development has come close on the heels of Swiggy getting a 25% valuation cut from its US-based investor Invesco, which valued the foodtech major at $10.7 Bn in January 2022.
The markdown could exacerbate problems for the Indian startup ecosystem, which is already under the scrutiny of investors for high valuation and a slew of other compliance issues in the past year.
The development piles up on the growing number of reports that have seen investors slash the valuations of their Indian portfolio startups amid growing market volatility and compliance issues plaguing Indian startups.
A case in point has been SoftBank, which reduced the valuation of its portfolio startup OYO to $2.7 Bn from $10 Bn last year. Right afterwards, Prosus also pegged its 9.76% stake in BYJU’S at $578 Mn, a far cry from the $22 Bn valuation at which the edtech major last raised capital.
BYJU’S Caught In A Storm
BYJU’S appears to have taken the biggest hit, just months after it raised a mega $250 Mn funding, at a valuation of $22 Bn, from existing investors in a mix of equity and debt.
The halving of its valuation could play a spoilsport for the country’s most valued startups amid reports that it was looking to raise $500 Mn from multiple investors, including private equity group TPG.
The news comes as BYJU’S appears surrounded on multiple fronts. The company has been weighed down by potential debt issues as it has been looking to renegotiate its $1.2 Bn term loan.
Not just this, the startup also fired 4,000 employees last year while a resurgent competition from peers, especially in the offline space, appears to have brought its break-neck growth of 2021 to a screeching halt.
The biggest issue, however, seems to be its mounting losses which rose nearly 20X year-on-year (YoY) to INR 4,588 Cr in the financial year 2020-21 (FY21), compared to INR 231.69 Cr in FY20.
The startup has also been in the line of fire for delayed financials and lax corporate governance safeguards. Many industry veterans have earlier criticised BYJU’s for questionable accounting practices and no clear path to profitability.
