BlackRock, an investor in Byju’s, estimates that its stake in the Indian edtech giant, once valued at $22 billion, is now worth nothing. The estimate write-off revealed in the SEC filing makes Byju’s one of the most spectacular startup slides in recent memory.
BlackRock disclosure for the period ending in March this 12 months comes a difficult 12 months for the Bengaluru-based startup, which until recently was the most beneficial startup in India. Last 12 months, Byju’s struggled to meet financial reporting deadlines, ultimately missing its revenue projections by greater than 50% due to various management issues.
These issues – combined with the sudden resignations of the auditor and board members – helped derail deliberations for the $1 billion fundraising effort.
Prosus, one of Byju’s biggest investors, publicly criticized the startup, alleging that the company “regularly disregarded his advice.” Facing a funding crisis, the startup subsequently raised $200 million, at a post-money valuation of about $250 million this 12 months, but some of its largest investors are legally difficult the investment.
So it’s no surprise that BlackRock suggested a zero valuation for Byju. This is not the first time the asset manager has undervalued Byju’s. Late October last 12 months, BlackRock reduced Byju’s valuation to around $1 billion.
A BlackRock spokesman declined to comment on the matter. Byju also declined to comment.
Separately, in a research note, HSBC also estimated that the value of Prosus’ 10% stake in the Indian startup had declined so much that analysts didn’t trouble to assign any value to it at all.
A spokesperson clarified in an email to TechCrunch after publication that HSBC was not attempting to value the entire company, only the Prosus shares, and that refraining from assigning a value does not equate to assigning a value of zero. However, the study’s music chart included a zero in the column denoting the estimated value.
The bank also estimated that Prosus’ shares in a number of other startups – Meesho, Pharmeasy, ElasticRun and Stack Overflow – are not as worthwhile as they used to be.
“We are applying a 50% discount to the price of the latest round of financing/acquisition of assets where the latest round is more than six months old to take into account the recent revision in public sector metrics of similar edtech/SaaS companies,” HSBC wrote in a note.
Adjustment: The article has been updated to make clear HSBC’s valuation of Byju. The story has also been updated to highlight BlackRock’s valuation adjustment for Byju’s shares.