In a research note, HSBC estimated that Indian education technology giant Byju's, once valued at $22 billion, is now worth zero. The write-down on that estimate has led to Byju's having one of the most dramatic share price declines of any startup in recent history.
This follows an extremely tough year for the Bengaluru-based startup, which was until recently India's most valuable company: Last year, Bijoux struggled to meet financial reporting deadlines and faced a variety of governance issues, ultimately missing its revenue target by more than 50%.
These issues, combined with the sudden resignations of the company's auditors and directors, helped derail Bijoux's efforts to raise $1 billion in financing.
Prosus, one of Byju's's key investors, publicly criticized the startup for “consistently ignoring advice” from its backers. Amid a cash crunch, Byju's raised $200 million this year at a post-money valuation of about $250 million, but the fundraising is being legally contested by some of Byju's' key investors, including Prosus.
It is no surprise then that HSBC, in a research note, valued Prosus' 10% stake in the Indian startup at zero due to ongoing litigation and cash woes.
The bank also estimated that many other startups are no longer worth as much as they once were.
Online pharmacy Pharmeasy is valued at $2.8 billion (down from a 2021 high of $5.6 billion), social commerce Meesho is valued at $2.5 billion (down from $4.9 billion), Indian agritech startup DeHaat is valued at $400 million (down from $800 million), and other unicorn logistics startup ElasticRun is valued at $800 million.
The bank values Stack Overflow, which Prosus acquired for $1.8 billion last year, at $900 million and Good Habits at $100 million (down from $200 million).
“Given the recent revision in public sector multiples for similar edtech/SaaS companies, we are applying a 50% discount to the most recent funding round/acquisition price for assets whose last round was more than six months old,” HSBC added.
Bijoux did not immediately respond to a request for comment outside business hours.