HSBC pegs Byju’s valuation to zero from $22b high

Byju’s co-founder Byju Raveendran / Photo credit: Byju’s

Once at US$22 billion, HSBC has pegged the valuation of Indian edtech firm Byju’s to zero, the financial major revealed in its latest equity research note, as quoted by TechCrunch.

Byju’s recently raised US$200 million through a rights issue, though at a discounted post-money valuation of US$250 million.

This funding, however, is under legal scrutiny by several investors, including Prosus – one of Byju’s most prominent investors. The investor alleged that Byju’s had “regularly disregarded” its advice for the edtech giant.

Legal battles and financial troubles have pushed HSBC to value Prosus’ 10% stake in Byju’s as nothing.

Previously one of India’s top-rated startups, Byju’s nosedive was marked by a series of events, including missed deadlines for its financial reports, questions on the authenticity of its fundraises, and calls to change its leadership.

In 2022, the firm laid off over 2,500 employees to cut costs. It also delayed its payments for the acquisition of Aakash Education.

Earlier this year, Byju’s Alpha, the company’s US division, filed for bankruptcy protection as it defaulted on US$1.2 billion in debt. Not long after, Byju’s India CEO Arjun Mohan stepped down, replaced by co-founder Byju Raveendran.

HSBC’s note also highlighted devaluations for other Indian firms. These include healthtech startup PharmEasy, whose valuation was halved to US$2.8 billion, and ecommerce platform Meesho, which is now valued at US$2.5 billion, down from US$4.9 billion.

See also: The $22b question on Byju’s valuation