Sunday, April 14, 2024
Outlook.com
Outlook India
Outlook Business

BlackRock Cuts Byju's Valuation To $1 Billion, A 95% Decline from Previous $22 Billion: Report

In October 2023, BlackRock valued Byju's shares at approximately $209.6 each, marking a substantial decline from the peak of $4,660 in 2022

BlackRock Cuts Byju's Valuation To $1 Billion, A 95% Decline from Previous $22 Billion: Report
Byju Raveendran, chief executive officer, Byjus
POSTED ON January 12, 2024 1:03 PM

BlackRock, the asset manager, has slashed the valuation of Indian edtech giant Byju’s by about 95 per cent, reducing it from $22 billion to $1 billion.  

According to TechCrunch report, BlackRock has once again lowered its value of Indian ed-tech unicorn by over 95 per cent from $22 billion to $1 billion. Byju's was the most valuable start-up in India at $22 billion. 

The mutual fund investor valued the edtech’s shares in October 2023 at about $209.6, a considerable decrease from the peak price of $4,660 in 2022. The firm owns less than 1 per cent of Byju. 

This drastic adjustment is the latest in a series, with Prosus valuing the unicorn at 'sub $3 billion' in 2023. Byju’s, once valued as high as $50 billion, faces financial challenges, including difficulty in raising capital, meeting payroll obligations, and managing a debt exceeding a billion dollars. The company has also encountered key departures and criticism from investors. 

The edtech which was once valued at $50 billion, is today facing serious financial difficulties despite having spent over $2.5 billion purchasing more than six international companies in 2021 and 2022. 

The company is currently facing several obstacles, such as trouble funding capital, paying employees on time, and handling debt that exceeds $1 billion.

During the Annual General Meeting (AGM), the company’s founder Byju Raveendran faced a strong reaction from investors who urged for increased financial transparency within the company, according to The Economic Times. 

As per various media reports, Raveendran has mortgaged two houses in Bengaluru to raise around Rs 100 crore, which was used to pay employee salaries. The company's valuation has sharply declined from $22 billion to less than three billion dollars, reflecting an 85 per cent drop.

In another development, the Enforcement Directorate (ED) has issued a notice accusing the company of Foreign Exchange Management Act (FEMA) violations amounting to over Rs 9,000 crore.

Byju's is also facing allegations of defaulting on payments totaling Rs 158 crore, leading to a bankruptcy application filed by BCCI in the National Company Law Tribunal (NCLT) under Section 9 of the Insolvency and Bankruptcy Code, 2016.   

  • Related Articles

    During the AGM, Byju's investors advised Byju Raveendran that for the company's support, it's crucial to communicate internal developments transparently to shareholders

    Investors Urge Financial Transparency at Byju's AGM, Raveendran Faces Strong Reaction: Report

    Byju Raveendran emphasised the urgent need for cash infusion, noting that businesses like Aakash and Epic are profitable, while Great Learning is at a break-even stage

    Byju Raveendran Reassures Senior Execs Of Resolution In 45-60 Days: Report

    As per the sources, Byju Raveendran has recently raised money by mortgaging home and real estate assets owned by family members to pay salaries

    Byju Raveendran Pledges Homes To Secure Funds For Staff Salaries Amidst Challenging Times