Massive Decrease: From $22 Billion to Under $3 Billion in Just One Year

Title: Byju’s Valuation Plummets to $3 Billion Amidst Ongoing Challenges

New Delhi: Byju’s, the prominent edtech startup, has suffered a significant blow as tech investor Prosus slashed its valuation to less than $3 billion. This marks an 86% decrease from its peak valuation of $22 billion last year. Byju’s, which experienced rapid growth during the Covid-19 pandemic, has been grappling with cash-flow issues and is currently embroiled in a dispute with creditors over a $1.2 billion loan.

Over the past year, major shareholders such as Prosus and Blackrock have successively reduced Byju’s valuation to $11 billion in March, $8 billion in May, and $5 billion in June. The latest announcement came from interim CEO Ervin Tu during Prosus’ earnings call. This revelation follows Byju’s recent disclosure of a loss of Rs 2,250 crore and a delay in filing its 2021/22 financial results, leading to the resignation of Deloitte and three board members. The company also witnessed the departure of its chief financial officer and chief technology officer last week.

These developments underscore the struggle faced by Byju’s, once considered the poster child of India’s thriving startup economy, as it attempts to recover from the impact of the Covid-19 pandemic. Byju’s faced legal action from creditors earlier this year after breaching covenants on its $1.2 billion loan, shedding light on founder Byju Raveendran. Raveendran’s remarkable journey from a tutor to the head of India’s most valuable tech startup had captivated investors.

During the pandemic, Byju’s made significant investments by acquiring various edtech startups not only in India but also in the United States, aiming to expand its reach rapidly. However, growth has slowed since the resumption of regular classes, and the company’s challenges have been further amplified by the prolonged legal dispute that shows no signs of abating.

Prosus did not provide a specific reason for the valuation cut. However, in July, the tech firm previously stated that Byju’s management had consistently disregarded advice, despite efforts by the former director to improve governance.

Byju’s now faces the daunting task of regaining its footing as it navigates financial struggles and works towards resolving its legal disagreements.