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  • Darshan Pareek

BlackRock slashes Byju's stake valuation by 95%

A photo of Byju's CEO and founder Byju Raveendran

Byju's CEO Byju Raveendran

Investment firm BlackRock has slashed its stake's valuation in Indian Ed-tech Byju’s by 95 per cent to $1 billion, adding to the woes of already beleaguered once-blockbuster startup.

From having Shah Rukh Khan as its brand ambassador to signing Lionel Messi as its global ambassador, Byju’s has been in the limelight for all the hot reasons -- but not any more.

BlackRock, a US based asset manager, which owns less than 1 per cent stake in BYJU’S, slashed its valuation from $22bn to $1bn. This is not the only time investment behemoth has marked down its shares' valuation in the startup. It had in April 2022 reduced the value of its shares in the firm from $4,660 to $2,855 per unit.

Prosus, a Dutch investor which owns 9.6 per cent stake in the firm, has also downgraded its valuation in Byju's. Prosus has criticised the edu-tech firm for reportedly not evolving sufficiently and disregarding the investors' advice and recommendations despite repeated attempts.

The company is facing mounting pressure from investors to address issues that it had previously left unresolved.

Byju's was preparing to go public in early 2022 through a SPAC deal that would have increased its value by up to $40 billion till its plans were scuppered by Russia’s invasion of Ukraine.

The recent scrutiny by the India federal agency Enforcement Directorate for alleged violations of FEMA is also one of many of Byju's problems.

Byju’s parent entity, Think and Learn Private Ltd, had reported a loss of Rs 2,533 crore in FY 2022. In last month’s annual general meeting (AGM), the stakeholders approved its financial statements for FY 2022 which was long due.

The Ed-tech company is facing a series of challenges including legal disputes with lenders regarding payment of $2.1bn Term B loan, financial pressure, substantial cash depletion, widespread layoffs, departures of key leadership figures, the resignation of auditors, and the exit of significant stakeholders.

It is also struggling to raise capital, make payroll, and pay off its billion-plus debt, besides missing its revenue target for the FY 2022.

In times like these, CEO Byju Raveendran has asked its investors to infuse $300mn in the company in lieu of a larger shareholding.

In April 2023, ET reported that Byju's was in process to raise $700 million at flat valuation. Reportedly, the company had previously raised $250 million from existing investors and Qatar Investment Authority.



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