Byju’s, Once Valued at $22 Billion, Now Worth “Zero”
Summary: Byju’s, once valued at $22 billion, is now considered worthless according to a recent HSBC research note. HSBC assigned zero value to Prosus’ nearly 10 percent stake in the company due to multiple legal issues and financial struggles. Byju’s is facing significant financial challenges, including difficulties in paying employee salaries. Last year, Byju’s planned to go public at a potential valuation of $40 billion, but its value has since plummeted. In January, BlackRock reduced its valuation of Byju’s from $22 billion to $1 billion. Recently, lenders petitioned in a US court against Byju’s US subsidiary for unpaid debts.
In a dramatic turn of events, the edtech giant Byju’s, once valued at a staggering $22 billion, is now considered to be worth zero. This revelation comes from a recent research note by the financial firm HSBC, which has assigned no value to the company’s shares amid mounting legal and financial troubles.
HSBC’s assessment specifically targeted Prosus’ nearly 10 percent stake in Byju’s, valued at approximately $500 million. “We assign zero value to Byju’s stake amid multiple legal cases and funding crunch,” stated the HSBC note. Previously, the firm had valued this stake by applying an 80 percent discount to the latest publicly disclosed valuation.
The embattled edtech firm is currently grappling with a severe funding crunch and an inability to pay employee salaries. “Byju’s is facing multiple headwinds. We and other shareholders are working every day to improve the situation. We are in close discussions with the company every day,” remarked a senior Prosus executive late last year.
In early 2022, Byju’s was on the brink of going public through a SPAC deal, which could have valued the company at up to $40 billion. However, the company’s fortunes have dramatically reversed since then. In January of this year, US-based investment firm BlackRock slashed the value of its holding in Byju’s from $22 billion to just $1 billion. BlackRock’s stake in the company is less than one percent.
The latest blow came earlier this week when a group of lenders filed a petition in a US court against new entities tied to Byju’s US subsidiary, alleging non-payment of debts.
Byju’s rapid descent from being a high-flying unicorn to facing existential threats highlights the volatile nature of the edtech industry, especially in the face of financial mismanagement and legal challenges. The company’s stakeholders and employees are now left to navigate a turbulent path forward as they attempt to salvage the remnants of its once-promising future.
