BlackRock slashes Byju’s valuation to $1 billion, down 95% from $22 billion, says report

Asset manager BlackRock has once again reduced its valuation of Indian ed-tech unicorn Byju’s, this time by around 95 percent from $22 billion to $1 billion, as per a Tech Crunch report citing company disclosures. At $22 billion, Byju's was India's most valuable start-up.

The downgrade is not too surprising. In October 2023, the mutual funds investor valued Byju’s shares at around $209.6 each, a significant drop from the peak of $4,660 in 2022. The company holds less than 1 percent of Byju's.

It provides multiple disclosures throughout the year, without explanation for its choices, the report said. Blackrock and Byju's did not respond to queries.

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While not the first, it is the most drastic adjustment in valuation that the troubled ed-tech start-up has faced. In 2023, Prosus, which holds 9 percent of the company, valued the unicorn at 'sub $3 billion'.

Reversal of Fortune

This valuation markdown represents a significant reversal of fortune for Byju’s, once considered the poster child of the Indian start-up ecosystem. Despite acquiring over half a dozen firms globally with an expenditure exceeding $2.5 billion in 2021 and 2022, Byju’s, which was once valued as high as $50 billion, is now facing financial challenges.

The company, which was preparing to go public in early 2022 through a SPAC deal with a potential valuation of up to $40 billion, had to put its IPO plans on hold due to Russia’s invasion of Ukraine in February that year. Later as market conditions deteriorated, so did Byju’s business outlook and investors began pressuring the company to address unresolved issues.

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Byju’s is currently grappling with various challenges, including difficulties in raising capital, meeting payroll obligations, and managing a debt exceeding a billion dollars. The company disclosed last month that it missed its revenue target for the financial year ending in March 2022.

Additionally, Byju’s CFO Ajay Goel left the start-up in less than seven months, returning to Vedanta in late October. This followed the high-profile departures of auditor Deloitte and three key board members in June. Prosus publicly criticized the Bengaluru-based startup in July for insufficient evolution and disregard of investor advice despite repeated attempts.

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