BYJU’S, the prominent edtech company, faces yet another blow to its valuation as US-based asset manager BlackRock has reduced its estimate by a staggering 95%, plummeting from $22 billion to $1 billion. This recent markdown follows BlackRock’s prior assessment in October last year, where BYJU’S shares were valued at approximately $209.6 each, indicating a substantial drop from the peak of $4,660 in 2022.
The asset manager, holding less than 1% of BYJU’S, has been consistently lowering its valuation of the edtech major. In April, BlackRock marked down the valuation by nearly 50% to $11.5 billion, down from the $22 billion valuation in 2022.
Notably, BlackRock is not the sole investor revising BYJU’S valuation downwards. In November, Dutch investor Prosus, with over 9% ownership in BYJU’S, valued the edtech giant at below $3 billion. Prosus, during its earnings call, highlighted multiple challenges faced by BYJU’S, leading to ongoing markdowns since the beginning of 2023.
BYJU’S Challenges and Financial Landscape: BYJU’S, a decacorn in the edtech sector, has encountered various challenges, including legal disputes, financial pressures, extensive layoffs, leadership departures, auditor resignations, and scrutiny by the Enforcement Directorate for alleged violations. The company sought investor support in the form of a $300 million infusion, offering larger shareholding in return.
Despite raising approximately $6 billion in funding from prominent investors, BYJU’S has been navigating through a series of setbacks. The company’s legal disputes regarding the repayment of a $1.2 billion Term Loan B, financial strain, and the departure of significant stakeholders have contributed to the ongoing challenges.
Industry Impact and Stakeholder Response: The decline in BYJU’S valuation has broader implications for the edtech sector, signaling the need for robust strategies amid the evolving landscape. As stakeholders evaluate their positions, the edtech giant grapples with financial scrutiny and legal complexities.
