India's once-hot startup Byju's was valued at $22 billion. Now, BlackRock says its investment is worth nothing.

Shubhangi Goel
Updated ·2 min read

  • BlackRock has written off its investment in once-hot Indian tech company Byju.

  • The Indian education tech giant is facing legal and financial troubles.

  • Investors, including Prosus, are trying to remove CEO Byju Raveendran.

In another blow to education tech giant Byju's, investor BlackRock says its stake in the once-hot company is worth nothing.

In 2022, the education tech company said it raised $800 million at a $22 billion valuation.

BlackRock was the first investor to publicly signal the company's troubles. In a first-quarter summary for some of its funds, the asset manager valued its stake in Byju's at $0, a number that has not been previously reported. In October, BlackRock slashed its valuation of the startup to less than $1 billion, TechCrunch reported.

BlackRock invested in Byju's parent Think & Learn through various funds, all of which appear to have written off the investment in recent filings.

HSBC, which is not an investor in Byju's, said in a recent research note that Dutch tech investor Prosus' stake in Byju was worth nothing. Prosus owns nearly 10% of the company and invested about $500 million in Byju's.

"We assign zero value to Byju's stake amid multiple legal cases and funding crunch. Previously, we valued ~10% stake in Byju's by applying 80% discount to the latest publicly disclosed valuation," the HSBC analyst wrote.

The Bengaluru-based company is facing significant turmoil.

Earlier this week, a group of lenders asked a US court to initiate bankruptcy proceedings against Byju's subsidiaries over a $1.2 billion loan. The company also cut the salaries of new sales hires by 90% in an attempt to cut costs, local outlet Inc42 reported on Thursday.

Byju's investors, including Prosus, are seeking the removal of its CEO, Byju Raveendran, and his family members from the board. The company's India CEO left in April, and it missed filing its 2023 financial reports.

The digital and physical tutoring company was seen as a star in the Indian startup scene and even sponsored the Indian cricket team until 2023. It is backed by the Chan-Zuckerberg Initiative, Sequoia Capital, and Tencent, among others.

Byju's first gained popularity during the pandemic for its unique approach to learning. The company faced challenges in 2022 after students began returning to schools and expensive acquisitions affected its bottom line.

The company planned to go public through a SPAC deal in 2022, which did not ultimately pan out.

Byju's and BlackRock did not immediately respond to requests for comment.

Correction: June 8, 2024 — This story has been updated to reflect that HSBC wrote about an investor's interest in Byju's. HSBC did not invest in Byju's.

Read the original article on Business Insider

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