Byju’s, the once-mighty etech giant from India, has experienced a staggering 95% drop in its valuation, plummeting from a peak of $22 billion to a mere $1 billion. This significant downturn in fortune has been recently reported by TechCrunch, shedding light on the financial struggles of the Bengaluru-based startup.
Key Points:
Valuation Freefall:
- Byju once considered India’s most valuable startup, faced a valuation nosedive from $22 billion to $1 billion.
- BlackRock, a prominent asset manager, valued Byju’s shares at $209.6 apiece in October 2023, starkly contrasting to the $4660 apiece valuation in 2022.
BlackRock’s Stance:
- BlackRock, which holds less than a 1% stake in Byju’s, contributed to this substantial valuation drop.
- The asset manager regularly discloses its portfolio but must clarify the reasons behind the significant adjustment in Byju’s worth.
Widespread Downgrades:
- BlackRock is not alone in downgrading Byju’s valuation; other investors, including Prosus, have also revised their estimates.
- Prosus, with a 9% stake, revealed an estimation of “sub $3 billion” for Byju, marking a collective loss of confidence among investors.
Strategic Spending and Acquisitions:
- Byju spent over $2.5 billion in 2021 and 2022, strategically acquiring more than half a dozen firms globally.
- The aggressive acquisition strategy bolsters Byju’s position in the competitive ed-tech market.
Investor Backing:
- Prominent investors, including Peak XV Partners, Lightspeed, UBS, and the Chan Zuckerberg Initiative, have backed Byju.
- Despite raising over $5 billion in equity and debt over the past decade, the recent devaluation underscores the challenges faced by the etech major.
The stunning reversal of Byju’s fortune, from being India’s most valuable startup to a fraction of its former valuation, highlights the challenges faced by the tech giant. Investors, including BlackRock and Prosus, have collectively reevaluated their confidence in the company, signaling a period of financial turbulence for Byju’s in 2024.
