Byju’s, India’s most valued edtech startup, is facing a crisis of confidence as its valuation has plummeted from $22 billion to less than $2 billion in less than a year. The company is looking to raise more than $100 million from existing stakeholders, including founder Byju Raveendran, at a steep 90% discount to its previous valuation, according to Bloomberg News.
The company has been struggling with legal and financial troubles, such as delayed filings, vendor disputes, employee exits, board resignations, and loan defaults. It has also faced criticism for its aggressive marketing tactics, poor quality of content, and unethical practices.
Byju’s has seen its valuation slashed by several investors, including BlackRock, Prosus NV, and Sequoia Capital India. The company’s auditor BDO has also raised doubts about its ability to continue as a going concern, citing a $1.2 billion term loan that may be due soon.
The company has claimed that it has improved its operating financial conditions and reduced its losses from underperforming businesses like Whitehat Jr and Osmo. It has also said that it is confident of raising funds through asset sales and that it is unlikely that the term loan will be required to be paid in the foreseeable future.
However, analysts have questioned the sustainability of Byju’s business model and growth prospects, especially in the highly competitive and regulated edtech sector. The company faces stiff competition from rivals like Unacademy, Vedantu, and Khan Academy, as well as new entrants like Amazon Academy and Google Classroom.
Byju’s was founded in 2011 by Byju Raveendran, a former teacher who created online courses for students preparing for competitive exams. The company expanded its offerings to include K-12 education, test preparation, coding, gaming, and international markets. It also acquired several companies, such as Aakash Educational Services, Epic, Great Learning, and Toppr.
Byju’s has raised over $3 billion from investors like Naspers, Tencent, Chan Zuckerberg Initiative, General Atlantic, Tiger Global Management, and Qatar Investment Authority. It has also received endorsements from celebrities like Shah Rukh Khan, Aamir Khan, and Virat Kohli.
Sources:
- Byju’s FY22 results: Byju’s FY22 losses soar to Rs 8,245 crore; cash … https://economictimes.indiatimes.com/tech/technology/byjus-fy22-revenue-at-rs-5014-crore-losses-swell-to-rs-8245-crore/articleshow/107078103.cms
- Byju’s to slash valuation by 90% to raise funds: Report – The Hindu https://www.thehindu.com/business/Industry/byjus-to-slash-valuation-by-90-to-raise-funds-report/article67768636.ece
- Byju’s: The unravelling of India’s most valued start-up – BBC https://www.bbc.com/news/world-asia-india-66126095
- Byju’s valuation zooms to $18 billion with fresh $300 million fundraise https://www.businesstoday.in/latest/corporate/story/byjus-valuation-zooms-to-18-billion-with-fresh-300-million-fundraise-308440-2021-10-04
- BlackRock marks down Byju’s valuation by 95% to $1 … – India Today https://www.indiatoday.in/business/story/blackrock-byjus-valuation-95-per-cent-edtech-startup-byju-raveendran-peak-xv-partners-2487782-2024-01-12.