In a recent research note, HSBC estimated that Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing. BlackRock, another investor in Byju’s, has also written off its investment. This dramatic reassessment marks one of the most spectacular startup declines in recent memory.
HSBC’s note comes after a turbulent year for the Bengaluru-based startup, which was previously India’s most valuable. Byju’s struggled with financial reporting deadlines, ultimately missing its revenue projections by more than 50% amid various governance issues.
These issues, combined with the sudden resignations of its auditor and board members, disrupted a $1 billion fundraising effort.
Prosus, one of Byju’s largest investors, publicly criticized the startup for “regularly disregarding advice.” Facing a funding crunch, the startup raised $200 million this year at a post-money valuation of about $250 million, but this investment is being legally disputed by some of its largest investors, including Prosus.
HSBC also estimated the value of Prosus’ 10% stake in the startup to be zero due to ongoing legal disputes and the funding crisis. These estimates have not been previously reported. Prosus had invested over $500 million in Byju’s and has not sold a single share.
The bank also estimated that a number of other startups are not nearly as valuable as they once were.
HSBC estimated that online pharmacy Pharmeasy should be valued at $2.8 billion (down from a high of $5.6 billion in 2021), social commerce Meesho at $2.5 billion (down from $4.9 billion), Indian agritech startup DeHaat at $400 million (down from $800 million), and former logistics unicorn ElasticRun at $800 million.
The bank estimates that Stack Overflow, a firm Prosus acquired last year for $1.8 billion, should be valued at $900 million, and GoodHabitz at $100 million (down from $200 million).
“We apply a 50% discount to the latest funding round/acquisition price for assets where the last round is older than six months to account for the recent correction in similar edtech/SaaS companies’ public sector multiples,” HSBC wrote in the note.
Byju’s didn’t immediately respond to a request for comment outside business hours.
