BlackRock, an investor in Byju’s, says that its $22 billion share in the Indian edtech giant is now worth nothing. Its estimates were lowered, which was made public in an SEC filing. This makes Byju’s one of the most impressive startup slides in recent memory.
BlackRock’s report for the year ending in March comes after a rough year for the Bengaluru-based startup, which wasn’t long ago India’s most valuable company. Last year, Byju’s had a hard time meeting its financial reporting dates and ended up missing its revenue goals by more than 50% because of problems with its governance.
Problems like these, along with the sudden resignations of the inspector and board members, slowed down plans to raise $1 billion.
One of Byju’s biggest investors, Prosus, openly criticized the startup, saying that it “regularly disregarded advice” from it. In order to get more money, the startup raised $200 million this year, giving it a post-money value of about $250 million. However, some of its biggest backers are suing to dispute the investment.
So it shouldn’t be a surprise that BlackRock has given Byju’s a value of zero. It’s not the first time that the asset manager has lowered the value of Byju’s. BlackRock cut the value of Byju’s to about $1 billion at the end of October of last year.
A BlackRock representative refused to say anything. Byju’s also refused to say anything.
Not only that, but HSBC said in a research note that Prosus’ 10% stake in the Indian company had lost so much value that its analysts have decided not to give it any value at all.
A spokeswoman told TechCrunch in an email after the story came out that HSBC wasn’t trying to figure out how much the whole company was worth, just Prosus’s share, and that not giving something a value is not the same as giving it a value of zero. However, the study note chart did put 0 in the estimated value column.
However, the bank also said that Prosus’s shares in a number of other startups, such as Meesho, Pharmeasy, ElasticRun, and Stack Overflow, are not nearly as valuable as they used to be.
HSBC wrote in a note that similar edtech and SaaS companies’ public sector multiples recently changed. To account for this, they applied a 50% discount to the latest funding round/acquisition price for assets where the last round was more than six months old. The note could be viewed through S&P Global Intelligence.
Also Read: Camshaft Says That Byju’s Unit is the Real Owner of $533 Million in Funds
The story was changed to make it clearer how much HSBC thinks Byju is worth. The story has also been changed to highlight BlackRock’s change in how much its Byju’s stake is worth.
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