BlackRock writes off entire $22 billion stake in Byju’s

BlackRock, a major investor in the Indian edtech giant Byju’s, has made a shocking revelation in its recent SEC filing. The investor now estimates that its stake in Byju’s, once valued at a staggering $22 billion, is now worth nothing. This drastic write-down in valuation marks one of the most dramatic startup declines in recent memory.

Byju’s, which was once hailed as India’s most valuable startup, has been facing a series of challenges in the past year. The company struggled to meet its financial reporting deadlines and fell short of its revenue projections by over 50%. Governance issues, including the resignations of key board members and auditors, further compounded Byju’s woes.

The situation worsened when a $1 billion fundraise deliberation fell through, with one of Byju’s largest investors, Prosus, publicly criticizing the startup for disregarding advice. Despite raising $200 million this year at a significantly reduced valuation, the investment is now being legally disputed by some of Byju’s major investors.

BlackRock’s decision to assign a zero valuation to Byju’s is not unprecedented. The asset manager had previously slashed Byju’s valuation to $1 billion in October last year. Similarly, HSBC has also estimated that Prosus’ stake in Byju’s has significantly diminished in value, along with its investments in other startups like Meesho, Pharmeasy, ElasticRun, and Stack Overflow.

The downward spiral of Byju’s and its impact on investors highlight the challenges faced by the edtech sector in recent times. As the industry grapples with changing market dynamics and regulatory scrutiny, the future of once-promising startups like Byju’s remains uncertain.