In a startling turn of events, edtech giant Byju’s, once valued at $22 billion, is now worth zero according to a research note from HSBC. The financial firm has assigned no value to Prosus’ nearly 10% stake in Byju’s, previously estimated at around $500 million.
HSBC’s note stated, “We assign zero value to Byju’s stake amid multiple legal cases and a funding crunch.” The firm previously valued the stake by applying an 80% discount to its last publicly disclosed valuation. The embattled edtech firm is currently grappling with significant financial and legal challenges, including difficulties in paying employee salaries.
“Byju’s is facing multiple headwinds. We and other shareholders are working daily to improve the situation. We are in close discussions with the company every day,” a senior Prosus executive mentioned in reports late last year.
The platform was gearing up for a public offering through a SPAC deal in early 2022, which could have valued the company at up to $40 billion. However, the situation has drastically changed. In January, US-based investment firm BlackRock slashed the value of its holding in Byju’s to a mere $1 billion, down from $22 billion in early 2022. BlackRock holds less than 1% of Byju’s shares.
Adding to its woes, a group of lenders recently petitioned against new entities tied to Byju’s US subsidiary, pushing them into bankruptcy in a US court, alleging non-payment of debts.
This dramatic decline in valuation underscores the severe challenges and uncertainties facing, as it navigates legal battles and financial instability. The situation remains fluid, with shareholders and the company actively seeking solutions to stabilize and recover from this downturn.
