Byju's investor BlackRock now estimates that its stake in the Indian edtech giant, once valued at $22 billion, is worth zero.The write-down in the company's estimates, revealed in an SEC filing, gave Byju's one of the most spectacular share price declines of any startup in recent history.
BlackRock's disclosure, for the period through March, comes after a tough year for the Bengaluru-based startup, which was until recently India's most valuable startup. Last year, Bejooes struggled to meet financial reporting deadlines and faced a range of governance issues that ultimately led it to miss revenue forecasts by more than 50%.
These issues, combined with the sudden resignations of the company's auditors and directors, helped derail efforts to raise $1 billion in financing.
Prosus, one of Bijou's major investors, has publicly criticized the startup, saying it “routinely ignored its advice.” Amid financial difficulties, the startup raised $200 million this year at a post-money valuation of about $250 million, but the investment is currently being legally challenged by some of its major investors.
It's not surprising, then, that BlackRock has suggested a zero valuation for Vijoux. This isn't the first time that an asset manager has lowered Vijoux's valuation: At the end of October, BlackRock lowered Vijoux's valuation to about $1 billion.
A BlackRock spokesman declined to comment. Bijoux also declined to comment.
HSBC also estimated in a research note that the value of Prosus' 10% stake in the Indian startup has fallen so much that its analysts no longer assign any value to it.
In an email to TechCrunch after publication, an HSBC spokesperson clarified that the bank wasn't trying to value the entire company, just its Prosus stake, and that not assigning a value is not the same as assigning a zero, although a chart in the study's notes did use zeros in the estimated value column.
The bank also estimated that Prosus' stakes in other startups – Meesho, Pharmeasy, ElasticRun and Stack Overflow – are not as valuable as they were before.
“Given the recent revision in public sector multiples for similar edtech/SaaS companies, we apply a 50% discount to the most recent funding round/acquisition price for assets whose last round was more than six months old,” HSBC said in a note.
Correction: The article has been updated to clarify HSBC's valuation of Byju's. The article has also been updated to highlight BlackRock's valuation adjustment to Byju's shares.