Once At $22 Billion, Byju's Value Is Not Cut To Zero
In what many find shocking, financial services giant HSBC slashed the edtech company Byju’s to zero. The company had a thumping fall from $22 billion in 2022 to zero in 2024, as it grapples with several legal case and funding crunch, as per the note submitted by HSBC.
The company is struggling to pay employee salaries amidst the hulking legal battles. A senior Prosus (a global tech investor) executive, last year told that Byju’s is “facing multiple headwinds. We and other shareholders are working everyday to improve the situation. We are in close discussion with the company every day”.
The crisis deeply impacted founder of the company, Byju Raveendran. As per Forbes Billionaire Index 2024, his net worth, which once stood at $2.2 billion (nearly 17,545 crore) the previous year, has fallen to zero.
Byju’s was established in 2011, and quickly gained prominence. It became India’s most valuable start-up with its valuation rising to $22 billion in 2022. The company made revolution with its innovative learning app, that helped students from primary school to MBA aspirants.
Read also: Byju’s – India’s Most Valued Edtech Start-up’s Downward Dwindle
In 2023, the company faced legal troubles when Enforcement Directorate (ED) conducted searches and found several “incriminating” documents and data, labelling a major setback.
By the end of the 2022 fiscal year, Byju’s net worth faced a substantial loss, surpassing $1 billion.
In November 2023, the company reported trimming its operating losses by 6 per cent in 2021-22 for its core online education business, with revenue more than doubling.
Read also: Byju’s Shuts Down Most Of Its India Offices
But, the ED issued a show-cause notice for an alleged Rs 9,362.35 crore violation under the Foreign Exchange Management Act (FEMA). In the same month Prosus substantially cut Byju’s valuation to under $3 billion, citing the company’s struggle with governance and cash flow problems.
In 2024, BlackRock slashed Byju’s valuation by 95 per cent to $1 billion. This came amid media reports of Raveendran pledging his homes to pay staff, after the exit of several Byju executives and board members due to delays in filing the company’s 2021-22 financial results.
