In March 2018, Byju’s had become India’s 11th unicorn when it had touched a valuation of $1 billion. Six years, a pandemic, massive layoffs, and ED raids later, it’s back to square one.
Asset management firm BlackRock has valued Byju’s at $1 billion, 95 percent down from its peak valuation of $22 billion. At the end of October, BlackRock said Byju’s shares were worth $209, down from their valuation of $4,660 just a couple of years ago. BlackRock owns less than a 1 percent stake in Byju’s.
BlackRock isn’t the only Byju’s investor that has dramatically slashed its valuation. In March last year, Prosus had valued Byju’s at $5.1 billion, and in November, it had valued Byju’s at less than $3 billion. Prosus holds a near 9 percent stake in the company.
This is a dramatic unravelling for Byju’s, which at one point was India’s highest-valued startup with a valuation of $22 billion. The coronavirus pandemic had had caused investors to pump into into the company, and Byju’s saw its valuation soar. But even as it was snapping up companies both in India and abroad, cracks had begun to appear. Byju’s had delayed filing its FY21 financial results for so long that even the Indian government commented on the issue. The results hadn’t made for pretty reading — Byju’s had lost Rs. 4,588 crore in FY 21 — and Byju’s had then proceeded to lay off thousands of employees. Around this time, questions had been raised in Indian parliament about Byjus’ alleged mis-selling of courses to economically vulnerable parents, and even the country’s child rights body had summoned CEO Byju Raveendran for questioning.
But things kept getting worse — not long after, the Enforcement Directorate had raided CEO Byju Raveendran’s home, and seized incriminating documents over violation of foreign exchange laws. Since then, Byju’s has seen its valuation marked down by several investors, and the company had tried to restructure its loan obligations. Byju’s had then been sued by its lenders, but it had gone on to sue them back and refused to pay back its loans amounting to $1.2 billion. Not long after, 3 of Byju’s board members had resigned in unison over concerns over its corporate governance , and a day later, its auditor, Deloitte, had also resigned. The ED had also issued the company a show-cause notice for contravening FEMA guidelines to the tune of Rs. 9,000 crore, and the company had been taken to NCLT court by BCCI over missed payments of its team India sponsorship which it had eventually transferred to Dream11.
It’s hard to think of a company that’s been buffeted by worse news in recent times. But less than two years after it was India’s highest valued startup, Byju’s has lost 95% of its value, and is staring at the bottom of the barrel mired in valuation markdowns, legal proceedings, and visits from the Enforcement Directorate. And with it once again being valued at $1 billion, Byju’s whirlwind last few years appear to have finally come a full circle.