Byju's Struggles Intensify As BlackRock Cuts Valuation By Over 90%: Report

Asset manager BlackRock has significantly downgraded the valuation of Byju’s, the Indian ed-tech unicorn, from a towering $22 billion (₹1.82 lakh crore) to just $1 billion (₹8,302 crore).

What happened? This dramatic markdown, as reported by TechCrunch citing company disclosures, marks a steep decline for Byju’s, which was once India's most valuable startup.

BlackRock’s decision to slash the valuation of its less than 1% stake in Byju's follows a series of reductions. As of October 2023, the mutual funds investor had already reduced the value of Byju's shares to approximately ₹17,400 each, plummeting from a peak of ₹3.87 lakh in 2022.

Why it matters? Byju's, once hailed as a leading light of the Indian startup ecosystem, is facing its most challenging phase. After a spending spree of over $2.5 billion (₹20,745 crore) on global acquisitions in 2021 and 2022, Byju's has encountered multiple financial obstacles.

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The ed-tech giant, initially preparing for an IPO in early 2022 with a potential valuation of $40 billion, was forced to postpone these plans due to geopolitical tensions and deteriorating market conditions.

Currently, Byju's is grappling with raising capital, fulfilling payroll commitments, and managing a debt exceeding one billion dollars.

The company recently reported missing its revenue target for the fiscal year ending March 2022. Moreover, the recent departure of CFO Ajay Goel, along with the exit of auditor Deloitte and three key board members, has compounded the company's troubles. Byju’s has also faced criticism from major investor Prosus for insufficient progress and ignoring investor advice. This downturn reflects a stark contrast to the once sky-high valuations and ambitious growth plans of the Bengaluru-based startup.

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