BlackRock, an investor in Byju’s, has determined that its investment in the Indian edtech giant, once valued at $22 billion, is now worth nothing. This valuation adjustment, revealed in an SEC filing, represents one of the most notable declines seen in the startup world recently.
BlackRock’s filing for the period ending March this year follows a tough year for the Bengaluru-based firm, which was previously India’s most valuable startup. Byju’s failed to meet its financial reporting deadlines last year, ultimately missing its revenue forecasts by over 50% while grappling with governance problems.
These problems — along with the sudden departures of its auditor and board members — disrupted plans for a $1 billion fundraising effort.
Prosus, one of Byju’s major investors, openly criticized the startup, accusing it of regularly ignoring its guidance. Amid funding issues, Byju’s managed to raise $200 million at a post-money valuation of roughly $250 million this year – but this investment is now legally contested by some of its major investors.
Given the circumstances, it’s not surprising that BlackRock now assigns a zero valuation to Byju’s. This isn’t the first time the asset manager has reduced Byju’s valuation; in October last year, BlackRock had slashed its valuation of Byju’s to around $1 billion.
A spokesperson for BlackRock declined to comment. Byju’s also chose not to comment.
Additionally, in a research note, HSBC has also estimated the value of Prosus’ 10% stake in the Indian startup to have dropped so significantly that its analysts didn’t assign any value to it.
A spokesperson clarified in an email that HSBC wasn’t trying to value the entire company, just Prosus’ stake, and that not assigning a value isn’t the same as assigning a value of zero. Nevertheless, the note’s chart showed zero in the column for estimated value.
The note also assessed that Prosus’ holdings in other startups — Meesho, Pharmeasy, ElasticRun, and Stack Overflow — have also seen significant declines in value.
“We apply a 50% discount to the latest funding round/acquisition price for assets where the last round is older than six months to account for the recent correction in similar edtech/SaaS companies’ public sector multiples,” HSBC wrote in the note.
Correction: The article was updated to clarify HSBC’s valuation of Byju. It also highlights BlackRock’s valuation adjustment regarding its stake in Byju’s.
