Byju's Worth: Diving from $22 Billion to Less Than $3 Billion in Just a Year

Byju's faced another setback as tech investor Prosus slashed its valuation to less than $3 billion, marking an 86% decline from its peak valuation of $22 billion a year earlier. The edtech startup, which saw rapid growth during the pandemic, grapples with cash flow issues and an ongoing dispute with creditors over a $1.2 billion loan.

Shareholders, including Prosus and Blackrock, successively devalued Byju's to $11 billion in March, $8 billion in May, and $5 billion in June over the past year. Interim CEO Ervin Tu disclosed the latest valuation adjustment during Prosus' earnings call, shortly after Byju's reported a ₹2,250 crore loss. The startup's delay in filing its 2021/22 financial results led to resignations from auditor Deloitte and three board members. Recently, both the chief financial officer and chief technology officer also resigned.

Byju's, once a symbol of India's thriving startup ecosystem, now grapples with post-Covid challenges, evident in its recent financial results. Facing a breach in covenants on a $1.2 billion loan, the company encountered a legal tussle with creditors this year. Founder Byju Raveendran's remarkable ascent from tutor to head of India's most valuable tech startup captivated investors, but the recent turmoil has put a spotlight on the company's struggles.

Amidst widespread school closures during the pandemic, Byju's embarked on an aggressive expansion spree, acquiring numerous edtech startups in India and the US. However, the return to normalcy in educational settings dampened the growth trajectory, compounded by an escalating legal battle that poses further challenges.

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Prosus' recent valuation reduction lacked explicit reasoning, but an earlier statement cited the company's management's alleged reluctance to heed advice despite efforts by the tech firm's former director to enhance governance.

Once the official sponsor of the Indian cricket team, Byju's also faces issues with the BCCI, which filed a case against the parent company over missed sponsorship royalties amounting to about $20 million, highlighting the financial strain on the education provider.