BYJU'S Faces Another Valuation Cut as BlackRock Reduces it by 95% to $1 Billion

US-based asset manager BlackRock has once again marked down the valuation of prominent edtech firm BYJU’S, this time by a substantial 95%, bringing the valuation down from $22 billion to $1 billion.


In October of the previous year, BlackRock had valued BYJU’s shares at approximately $209.6 each, representing a significant decline from the peak of $4,660 in 2022. As reported by Techcrunch, BlackRock’s stake in the ed-tech giant is less than 1%.


Earlier in April, BlackRock slashed BYJU’s valuation by nearly 50%, pegging it at $11.5 billion, a sharp decrease from the $22 billion valuation the edtech decacorn received in 2022.


The asset manager, holding less than 1% of BYJU’S, reportedly adjusted the value of its shares in the startup to $2,855 per share from the April 2022 valuation of $4,660 per unit.


It’s worth noting that BlackRock is one of many investors significantly revising BYJU’s valuation. In November, Dutch investor Prosus, holding over 9% of BYJU’s, valued it at less than $3 billion.


During an earnings call, Prosus interim chief executive Ervin Tu highlighted multiple challenges faced by BYJU’S. Prosus, owning a 9.6% stake in the startup, has consistently marked down the valuation of its stake in BYJU’s since the beginning of 2023.


Amid legal and governance issues, BYJU’s CEO Byju Raveendran reportedly requested investors to inject $300 million into the company in exchange for a more significant shareholding.


BYJU’s, a prominent edtech player, has raised around $6 billion in funding from notable investors such as Qatar Investment Authority, General Atlantic, Sumeru Ventures, Vitruvian Partners, BlackRock, Peak XV Partners, Chan Zuckerberg Initiative, Tencent, Tiger Global.


BYJU’s has been grappling with various challenges, including legal disputes with lenders regarding the repayment of its $1.2 billion Term Loan B, financial pressures, significant cash depletion, widespread layoffs, key leadership departures, auditor resignations, and the exit of substantial stakeholders.


Moreover, the Enforcement Directorate (ED) is currently scrutinising the company for alleged violations of the Foreign Exchange Management Act (FEMA).


In its annual general meeting (AGM) held last month, BYJU’s stakeholders approved its financial statements for FY22. The edtech firm, excluding acquisitions, reported an EBITDA loss of INR 2,253 crore in FY22 for its parent entity, Think and Learn Private Ltd, compared to INR 2,406 crore in FY21. The entity’s total income was INR 3,569 crore in FY22, up from INR 1,552 crore. However, the company did not disclose specific crucial metrics.