Edtech giant Byju’s, once valued at $22 billion, is now deemed worth zero, as revealed by a recent research note from financial firm HSBC.
According to HSBC, the firm has assigned zero value to investment company Prosus’ nearly 10 percent stake in Byju’s, amounting to around $500 million, citing ongoing legal disputes and a funding crunch.
“We assign zero value to Byju’s stake amid multiple legal cases and funding crunch,” the note stated.
Previously, a value was attributed to around 10 percent stake in Byju’s, applying an 80 percent discount to the latest publicly disclosed valuation.
The company faces significant challenges, including difficulties in meeting employee salary obligations amidst a backdrop of mounting legal battles.
Reports indicate that Byju’s had plans to go public in early 2022 through a Special Purpose Acquisition Company (SPAC) deal, which would have valued the company at up to $40 billion.
However, recent developments have underscored the company’s struggles, with US-based investment firm BlackRock slashing the value of its holding in Byju’s from $22 billion to a mere $1 billion in early 2022.
Byju’s ownership by BlackRock stands at less than 1 percent.
Furthermore, this week saw a group of lenders filing a petition against new entities linked to Byju’s US subsidiary, alleging bankruptcy due to non-payment of debts.
As Byju’s navigates these challenges, stakeholders continue to engage with the company in efforts to improve the situation.
