Byju’s Valued At $3 Billion By Investor Prosus, Was Worth $22 Billion Last Year

Byju’s annus horribilis has has a corresponding impact on the company’s valuation.

Byju’s has been valued at less than $3 billion by its investor Prosus. Prosus is one of the biggest investors in Byju’s, and owns a 9.6 percent stake in the company. In October 2022, Byju’s was valued at $22 billion, which means that the company has lost 86 percent of its value in the last 14 months.

This isn’t the first time that Prosus has marked down its Byju’s investment. In March this year, Prosus had slashed the valuation of the company to $5.1 billion. In June, Prosus’s representative on Byju’s board had quit along with representatives of Sequoia and the Chan Zuckerberg foundation. They’d flagged issues relating to the company’s corporate governance and compliance after their simultaneous resignations, and indicated that they’d end up cutting the company’s valuation. Prosus has now cut Byju’s valuation to less than $3 billion.

Byju’s has had a nightmarish last few quarters. It 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 as much as half 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. Just this month, ED has issued the company a show-cause notice for contravening FEMA guidelines to the tune of Rs. 9,000 crore. And just yesterday, the company had been taken to NCLT court by BCCI, likely 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 the company’s rise had been just as meteoric — after becoming a unicorn only in 2018, it had become India’s highest valued startup by 2021. But less than two years later, it’s lost nearly 90% of its value, and is staring at the bottom of the barrel mired in valuation markdowns, legal proceedings, and visits from the Enforcement Directorate. They bigger they are, the harder they seem to truly fall in India’s startup ecosystem.