Byju’s Valuation Drops from $22 Billion to Zero Amid Financial and Legal Troubles
Byju’s, the once-celebrated edtech giant valued at $22 billion, has seen its worth plummet to zero, according to a recent research note by financial firm HSBC. The company is currently embroiled in multiple legal battles and is struggling to pay employee salaries, which has led to this drastic reassessment.
Byju’s, the once-celebrated edtech giant valued at $22 billion, has seen its worth plummet to zero, according to a recent research note by financial firm HSBC. The company is currently embroiled in multiple legal battles and is struggling to pay employee salaries, which has led to this drastic reassessment.
HSBC has assigned a zero value to investment company Prosus’ nearly 10 percent stake in Byju’s, estimated to be about $500 million. The note stated, “We assign zero value to Byju’s stake amid multiple legal cases and funding crunch. Previously, we valued around 10 percent stake in Byju’s by applying an 80 percent discount to the latest publicly disclosed valuation.”
The embattled edtech firm is grappling with numerous challenges, including severe financial constraints and ongoing legal disputes. A senior executive at Prosus highlighted the gravity of the situation, noting that shareholders are working tirelessly to improve the company’s circumstances and are in constant communication with Byju’s.
In an unexpected turn of events, Byju’s had been gearing up for a public offering in early 2022 through a Special Purpose Acquisition Company (SPAC) deal that could have valued the company at up to $40 billion. However, the reality has been starkly different.
In January this year, US-based investment firm BlackRock drastically reduced the value of its holding in Byju’s from $22 billion to a mere $1 billion. BlackRock owns less than one percent of the company, but this valuation cut signaled significant trouble.
The financial woes of Byju’s intensified earlier this week when a group of lenders petitioned a US court against new entities tied to Byju’s US subsidiary. The lenders allege that these entities have failed to pay their debts, further complicating the company’s already precarious financial situation.
Sources By Agencies
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