BlackRock Writes Off Stake in Byju's, Once Valued at $22 Billion
BlackRock Writes Off Stake in Byju's, Once Valued at $22 Billion
BlackRock, a significant investor in India's edtech giant Byju's, has revealed in a recent SEC filing that its stake, once valued at $22 billion, is now estimated to be worth nothing. Byju's has faced a tumultuous year, marked by financial reporting and governance issues, leading to a substantial revenue shortfall. The startup also grappled with abrupt resignations and legal disputes with its investors, resulting in a drastic downturn.
Key Takeaways
- BlackRock's stake in Byju's, previously valued at $22 billion, is now deemed worthless.
- Byju's experienced a challenging year, falling short of revenue projections and facing governance obstacles.
- Abrupt resignations disrupted a planned $1 billion fundraise for Byju's.
- Byju's raised $200 million amidst legal disputes over its $250 million valuation.
- HSBC indicates a severe decline in Prosus' stake in Byju's, with no assigned value.
Analysis
The sharp decline in Byju's valuation is attributed to severe financial and governance challenges compounded by key departures. This plunge not only rendered BlackRock's and Prosus' investments virtually valueless but also stalled Byju's fundraising efforts. In the long run, the startup may struggle to regain investor trust and market share, potentially leading to restructuring or a sale. This downturn might also result in increased scrutiny and skepticism towards the wider edtech sector, impacting future growth and funding.
Did You Know?
- BlackRock: A prominent multinational investment management corporation based in New York City, BlackRock is the world's largest asset manager, with $8.68 trillion in assets under management as of Q1 2021.
- SEC Filing: The Securities and Exchange Commission (SEC) is a key regulatory agency that enforces federal securities laws and oversees the securities industry and markets. An SEC filing is a formal document submitted to the U.S. Securities and Exchange Commission, mandatory for public companies, certain insiders, and broker-dealers.
- Prosus: A Dutch multinational conglomerate spun off from Naspers, Prosus is among the world's largest technology investors with diverse internet holdings, including significant investments in Tencent, Mail.ru, and DeliveryHero.