BYJU’S Valuation Takes a Hit as BlackRock Marks Down Shares by Almost 50%
- ByStartupStory | April 1, 2023
BYJU’S reportedly faces a significant setback as US-based asset manager BlackRock has devalued the edtech major’s worth to $11.5 billion, a reduction of nearly 50%. This marks a sharp decline from the $22 billion valuation at which the edtech decacorn was last valued in 2022. BlackRock, which owns less than 1% stake in BYJU’S, is believed 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, according to reports.
The valuation cut was reportedly disclosed in filings viewed by TechCrunch, and was first reported by The Arc. Similarly, Swiggy, the foodtech major, saw a 25% markdown from its US-based investor Invesco, who valued the company at $10.7 billion in January 2022. The downgrades could further aggravate issues for the Indian startup ecosystem, which has already faced scrutiny from investors over high valuations and various compliance issues over the past year. BYJU’S has not yet issued a statement on the matter.
The increasing market volatility and compliance issues plaguing Indian startups have led to a growing number of reports of investors cutting the valuations of their portfolio startups. SoftBank reduced OYO’s valuation from $10 Bn to $2.7 Bn, while Prosus valued its 9.76% stake in BYJU’S at $578 Mn, a significant drop from the edtech major’s last valuation of $22 Bn when it raised capital.
BYJU’S, India’s most valuable startup, has reportedly suffered a nearly 50% markdown in its valuation by US-based asset manager BlackRock, which has cut the edtech giant’s worth to $11.5 Bn. The markdown comes shortly after BYJU’S raised $250 Mn from existing investors at a valuation of $22 Bn. The downgrading of the valuation could have negative implications for the edtech major, especially as it is looking to raise $500 Mn from investors including TPG.
BYJU’S is facing several challenges as it attempts to navigate the increasingly volatile Indian startup ecosystem. The company has been grappling with potential debt issues as it seeks to renegotiate its $1.2 billion term loan. In addition, BYJU’S fired 4,000 employees in 2022, while competition from peers in the offline space has slowed down its breakneck growth from the previous year. The company’s mounting losses, which increased nearly 20 times YoY to INR 4,588 crore in FY21, compared to INR 231.69 crore in FY20, have been a major concern. Moreover, the company has faced criticism for delayed financials and poor corporate governance practices. Several industry experts have also raised questions about BYJU’S accounting practices and lack of a clear path to profitability.
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