HSBC and BlackRock estimate that the Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing.
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In a recent research note, HSBC estimated that Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing. BlackRock, an investor in Byju’s, has separately also written off the investment. The write-down in their estimations makes Byju’s one of the most spectacular startup slides in recent memory.
HSBC’s note follows a rough year for the Bengaluru-based startup, which was India’s most valuable startup not long ago. Byju’s struggled to meet its financial reporting deadlines last year, ultimately falling short of its revenue projections by more than 50% as it faced various governance issues.
Those issues — coupled with the abrupt resignations of its auditor and board members — contributed to derailing a $1 billion fundraise deliberation.
Prosus, one of Byju’s largest investors, publicly slammed the startup, alleging the company had “regularly disregarded advice” from it. Amid the funding crunch, the startup then raised $200 million at a post-money valuation of about $250 million this year – but the investment is being legally disputed by some of its largest investors, including Prosus.
It stands to reason then, that HSBC also estimated the value of Prosus’ 10% stake in the Indian startup to be zero because of the ongoing legal cases and funding crunch. HSBC’s estimations haven’t been previously reported. Prosus had invested more than $500 million in Byju’s over the years and hasn’t sold a single share.
BlackRock disclosure.
The bank also estimated that a number of other startups are not nearly as valuable as they once were.
HSBC estimated that online pharmacy Pharmeasy should be valued at $2.8 billion (down from a high of $5.6 billion in 2021), social commerce Meesho at $2.5 billion (down from $4.9 billion), Indian agritech startup DeHaat at $400 million (down from $800 million), and former logistics unicorn ElasticRun at $800 million.
The bank estimates that Stack Overflow, a firm Prosus acquired last year for $1.8 billion, should be valued at $900 million, and GoodHabitz at $100 million (down from $200 million).
“We apply a 50% discount to the latest funding round/acquisition price for assets where the last round is older than six months to account for the recent correction in similar edtech/SaaS companies’ public sector multiples,” HSBC wrote in the note.
Byju’s didn’t immediately respond to a request for comment outside business hours.
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