New York-headquartered asset management giant BlackRock has announced that it is writing off its earlier sky-high investment in India’s edtech startup, Byju’s, at zero. This development comes addition to the steep tumble that Byju’s has seen, after it was valued at a staggering $22 billion just some time back.
According to a TechCrunch report, BlackRock’s disclosure, made in an SEC filing, underscores the significant challenges faced by Byju’s in recent times. The Bengaluru-based startup, which was once the poster child of India’s booming startup ecosystem, has been grappling with a series of setbacks, including governance issues and financial woes.
Last year, Byju’s struggled to meet its revenue projections, falling short by more than 50%. Its troubles were further aggravated by sudden resignations of its key staff including its auditor and board members. In the midst of all this, a $1 billion fundraise got stuck, and Byju’s has been since burning money.
Prosus, one of Byju’s largest investors, publicly criticized the startup for disregarding advice, adding to the mounting pressure. Despite raising $200 million this year, legal disputes have cast a shadow over the investment, highlighting the turbulent times faced by Byju’s.
This isn’t the first time BlackRock has devalued its investment in Byju’s. Last year, the asset manager slashed the startup’s valuation to about $1 billion. Now, with its investment deemed worthless, Byju’s faces an uphill battle to regain investor confidence and navigate through its myriad challenges.
The news comes amid a broader reassessment of investments in the Indian startup ecosystem. In a recent research note, financial services firm HSBC assigned zero value to Dutch conglomerate Prosus’ stake in Byju’s, amid legal disputes and a fundraise crunch. The note highlighted the growing worries around Byju’s and how it would be able to weather the ongoing storm.
Byju’s, which once enjoyed the spotlight as India’s most valuable startup, now finds itself at a crossroads. With mounting legal battles, financial troubles, and investor skepticism, the road ahead will be tough for the beleaguered edtech company.
