In a research note, HSBC estimates that Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing. The write-off in its estimates makes Byju’s one of the most spectacular startup slides in recent memory.
This is a very difficult yr for the Bengaluru-based startup, which until recently was the most useful Indian startup. Last yr, Byju’s struggled to fulfill its financial reporting deadlines, ultimately missing its goal by greater than 50% on account of various management issues.
These issues – coupled with the sudden resignations of the auditor and board members – helped derail Byju’s $1 billion fundraising deliberations.
Prosus, one of Byju’s largest investors, publicly criticized the startup, accusing it of “regularly disregarding the advice” of its sponsor. Facing a funding crisis, Byju’s then raised $200 million, at a post-money valuation of around $250 million this yr – financing that is being legally challenged by some of Byju’s largest investors, including Prosus.
It is subsequently obvious that in the research note, HSBC also assessed the value of Prosus’ 10% stake in the Indian startup at zero on account of ongoing court cases and lack of funds.
The bank also estimated that many other startups are not as beneficial as they once were.
Estimates that online pharmacy Pharmeasy ought to be valued at $2.8 billion (down from $5.6 billion in 2021), social commerce Meesho at $2.5 billion (down from $4.9 billion), Indian startup agritech DeHaat at $400 million (down from $800 million), and logistics startup ElasticRun, an otherwise unicorn, worth $800 million.
The bank estimates that Stack Overflow, which Prosus acquired last yr for $1.8 billion, ought to be valued at $900 million and GoodHabitz at $100 million (down from $200 million).
“We are applying a 50% discount to the price of the latest round of financing/asset acquisition 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 added.
Byju’s didn’t immediately reply to a request for comment outside business hours.