BlackRock’s Valuation Cuts Hit Byju’s, Plunging Indian Startup’s Value to $1 Billion
At the end of October last year, BlackRock disclosed a sharp reduction in the value of their holding in Byju’s, bringing down the implied valuation of the Indian startup to $1 billion from a staggering $22 billion in early 2022. This valuation adjustment comes as a surprise, as the asset manager had previously valued Byju’s shares at $209.6 each before the latest markdown – which hasn’t been reported until now.
When questioned about the sudden drop in valuation, BlackRock declined to comment, while Byju’s chose to remain tight-lipped.
But BlackRock isn’t the only investor that has taken a negative turn on their evaluation of Byju’s – earlier in 2021, Prosus announced that they valued the company at “sub $3 billion.” Prior to this, Byju’s had been valued at a staggering $22 billion, making it the most valuable startup in India.
For Byju’s, this is a significant downfall from its previously esteemed position as the shining star of the Indian startup ecosystem. The company, which spent over $2.5 billion in 2021 and 2022 acquiring various firms globally, was once estimated to be worth an astounding $50 billion by influential investment bankers, as previously reported by TechCrunch.
The startup has been backed by more than a dozen prominent investors, such as Peak XV Partners, Lightspeed, UBS, and the Chan Zuckerberg Initiative. Byju’s quickly gained popularity in India with its innovative teaching methods, using relatable real-life objects like pizza and cake to simplify complex concepts. In the past decade alone, the company has raised over $5 billion through a combination of equity and debt.
Byju’s had been gearing up to go public in early 2022 through a SPAC deal that would have valued the company at a staggering $40 billion. Unfortunately, this plan was put on hold when Russia’s invasion of Ukraine sent markets into a downward spiral in February. According to sources close to the matter, the worsening market conditions had a ripple effect on Byju’s business outlook. With mounting pressure from investors, the company was forced to address lingering issues that had been previously overlooked.
Stay tuned for more updates on this developing story.
