This could be a shock to many, edtech firm Byju’s, which was once valued at $22 billion is now worth zero, according to a research note by financial firm HSBC.
HSBC has assigned zero value to investment company Prosus’ nearly 10 per cent stake (or about $500 million) in Byju’s.
“We assign zero value to Byju’s stake amid multiple legal cases and funding crunch,” according to the HSBC note.
“Previously we valued around 10 per cent stake in Byju’s by applying an 80 per cent discount to the latest publicly disclosed valuation,” the note added.
The edtech firm is struggling to pay salaries to employees amid legal battles.
Byju’s is facing multiple headwinds. We and other shareholders are working every day to improve the situation. We are in close discussions with the company every day,” a senior Prosus executive was quoted as saying in reports late last year.
In fact, Byju’s was preparing to go public in early 2022 through an SPAC deal that would’ve valued the company at $40 billion.
In January this year, US-based investment firm BlackRock cut the value of its holding in Byju’s to a mere $1 billion from $22 billion in early 2022.
BlackRock owns less than 1 per cent of Byju’s.
Earlier this week, a consortium of creditors filed a petition in a US court to declare bankruptcy for newly affiliated entities linked to Byju’s US subsidiary, asserting that these entities are failing to fulfil their financial obligations.