BlackRock slashes edtech giant Byju's valuation by about 50% to $11.5 bn

While BlackRock has slashed Byju's valuation by nearly 50 per cent, Invesco has cut Swiggy's stake value by over 23 per cent

US investors reduced the value of their holding in Byju’s and Swiggy last year. US-based asset manager BlackRock has reportedly reduced the valuation of the edtech giant Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the Bengaluru-based edtech decacorn was last valued in 2022, according to the filings accessed by tech-focused media platform The Arc. BlackRock has been marking down the valuation of Byju’s since June last year.

Byju’s could not be reached for comment related to this development and a query to BlackRock remained unanswered.

BlackRock joined Byju’s cap table at a $12-billion valuation in 2020. Its stake is under 1 per cent. In April 2022, BlackRock was valuing the shares of Byju’s at about $4,660 per unit. This translated into a company valuation of about $22 billion. However, BlackRock marked down the value of its shares in Byju’s to $2,400 per share at the end of December 2022.

Byju’s posted losses of Rs 4,588 crore in FY21, 19 times more than the preceding year, according to the latest available financial report. Its acquisition of kids' coding firm WhiteHat Jr reportedly contributed 26.73 per cent to the total loss. Byju’s, valued at $22 billion, was targeting to be profitable by March this year.

In February, Byju’s reportedly handed pink slips to about 1,000 employees in a fresh round of layoffs, although sources in the company said the move was part of the “optimisation” strategy that the edtech firm had announced last year that included sacking 2,500 workers.

Earlier this year Byju’s reportedly sought more time from lenders to renegotiate an agreement governing a $1.2 billion loan that is in breach of covenants, according to people familiar with the matter. Last year in December, a group of creditors of Byju’s told the edtech giant to liquidate its assets in the US worth about $500-800 million to repay a part of a $1.2-billion loan if the firm is not able to provide the money from its cash reserves, according to sources in the know.

In another development, US investor Invesco has reportedly marked down its investment in food delivery giant Swiggy to 23 per cent. In January 2022, Swiggy raised $700 million in Invesco-led new funding, which made the outfit a decacorn, almost doubling its valuation to $10.7 billion.

Earlier this year, Swiggy laid off 380 employees from its workforce of 6,000, citing challenging macroeconomic conditions and a slowdown in growth of its food delivery business.

Swiggy, in results for the previous financial year, reported that its losses widened 2.24 times to Rs 3,628.9 crore in FY22, from Rs 1,616.9 crore in FY21, fuelled by a 227 per cent rise in costs. Expenses came in at Rs 9,748.7 crore in FY22, compared to Rs 4,292.8 crore the year before. This despite Swiggy reporting revenue of Rs 5,704.9 crore, a little over a twofold jump from the previous financial year.