BlackRock, Baron Capital cut value of their BYJU's stakes to nothing

BlackRock, Baron Capital cut value of their BYJU's stakes to nothing

FILE PHOTO: Advertising hoardings of Byju's, an education technology company and one of India's biggest startups, pictured outside a branch in New Delhi, India, June 23, 2023. REUTERS/Adnan Abidi/File Photo

US global investment management firm BlackRock has valued its stake in BYJU’s at $0, a major downgrade for the Indian edtech giant, which was once valued at $22 billion.

In a regulatory filing with the US Securities and Exchange Commission (SEC), BlackRock marked down the valuation of its shares, held by its various funds, in BYJU’s parent Think & Learn. The BlackRock funds appeared to have written off the investment in recent filings.

In January, BlackRock had marked down the implied valuation of BYJU’s to about $1 billion, an over 95% drop from its highest valuation of $22 billion in 2022.

BYJU’s emerged as India‘s most valuable startup amid the boost that the edtech sector received during the COVID-19 pandemic. Since then its fortunes have dwindled and the Byju Raveendran-led company has faced several crises including an auditor exit, regulatory probes and calls from its investors to oust its CEO Byju Raveendran for mismanagement.

BYJU’s said in April that it will restructure its business into three divisions following numerous setbacks in the past few years that have led to a crisis of investor confidence.

In February, a group of investors including Prosus and Peak XV voted to oust CEO Byju Raveendran due to governance, financial mismanagement, and compliance issues.

Separately, US-based asset management company Baron Capital Group also reduced the valuation of its stake in BYJU’s by 99.85%, sharply cutting the edtech company’s valuation to nearly $24 million.

Baron Capital holds 15,334 shares through Baron Emerging Markets Fund and 9,201 shares via Baron Global Advantage Fund. In its filings with the US SEC, Baron appraised its investment in BYJU’s at $75,485 and $45,294, respectively.

Baron had earlier expressed disappointment at BYJU’s, following events such as the departure of board members and auditor Deloitte. It invested in Think & Learn in the second quarter of 2021 as part of a private round of financing.

On the other hand, HSBC said in a recent research note that Dutch tech investor Prosus’ stake in BYJU’s was worth nothing. Prosus invested about $500 million in BYJU’s.

BYJU’s overtook Paytm in 2021 to become the most valuable Indian startup after raising about $340 million in fresh funding at a valuation of $16.5 billion.

Edited by: Pramod Mathew

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