BlackRock further slashes Byju's valuation to $1 billion from $22 billion: Report

Edtech firm Byju's, which was once valued at $22 billion, valuation was slashed by asset manager BlackRock to $1 billion. In a regulatory filing dated January 5 with the US Securities and Exchange Commission for the October 2023 quarter, BlackRock said it valued Byju’s shares at about $209.6 apiece, down from the peak of $4,660 in 2022, TechCrunch reported.

BlackRock, which is the world's largest asset manager, holds less than 1 per cent stake in the edtech firm. This is the third time BlackRock has marked down the valuation of its shares in Byju’s. Earlier, BlackRock had valued it at $8.2 billion at the end of March quarter of 2023.

Byju’s, which was valued at $22 billion during its most recent fundraising round in October 2022, has experienced a substantial decline in its operations and is now seeking to sell assets in order to address its debt.

BlackRock is not the only investor that has significantly reduced their valuation of the startup. Prosus, which holds approximately 9 per cent stake, stated last year that it valued the unicorn at less than $3 billion.

However, BlackRock's devaluation is the most significant adjustment so far for the edtech, founded by Byju Raveendran and Divya Gokulnath.

Byju's has been grappling with challenges like cash flows and debt repayment in the last one year. The valuation markdown is a major setback for Byju's, which was previously considered as the most prominent example of the Indian start-up ecosystem. 

The company had to delay its plans to go public in early 2022 through a SPAC deal with a potential valuation of up to $40 billion because of Russia's invasion of Ukraine in February that year. Following which, investors began pressuring the company to address unresolved issues.

The situation got more serious after Byju’s CFO, Ajay Goel left the start-up in under seven months and rejoined Vedanta. This departure came after the notable exits of Deloitte, the company's auditor, and three important board members in June. In July 2023, Prosus openly criticised the edtech for its lack of progress and failure to heed investor advice, despite numerous efforts.

Following this, Byju's was questioned for delaying the financial results. In November, it filed the delayed results, but they were incomplete. The embattled edtech major reported a 2.3x growth in revenues for FY22 for its core business, encompassing K12 learning programmes.

While revenues surged to Rs 3,569 crore in FY22 from Rs 1,552 crore in FY21, operating loss narrowed to Rs 2,253 crore in FY22, from Rs 2,406 crore in FY21. However, the company did not release the numbers for its subsidiaries. 

Also read: Byju Raveendran is doing whatever it takes to keep employee morale up