Edtech Giant Byju’s Suffers Steep Valuation Drop, Plummeting from $22 Billion to Under $3 Billion

Beleaguered edtech startup Byju’s has suffered another setback as tech investor Prosus slashed its valuation to a mere $3 billion, marking an astonishing 86% drop from its peak value of $22 billion reached last year. This latest development further highlights the company’s deepening struggles, which include cash-flow issues, a contentious $1.2 billion loan dispute with creditors, and a series of high-profile resignations.

Byju’s rapid expansion during the COVID-19 pandemic, fueled by school closures and a surge in online learning, proved unsustainable as classes resumed and the competitive landscape intensified. The company’s growth has stalled, and its financial situation has deteriorated, leading to a cascade of valuation cuts by major shareholders like Prosus and Blackrock.

Over the past year, Byju’s valuation has been repeatedly downgraded: from $11 billion in March to $8 billion in May, and finally to a rock-bottom $5 billion in June. The latest valuation cut, disclosed by interim CEO Ervin Tu during Prosus’ earnings call, came just days after Byju’s announced a staggering ₹2,250 crore loss.

These challenges have also triggered internal turmoil, with Byju’s auditor Deloitte and three board members resigning in protest over delayed financial filings and questionable governance practices. The company’s chief financial officer and chief technology officer also tendered their resignations last week.

Byju’s, once hailed as the embodiment of India’s booming startup ecosystem, now finds itself grappling with a harsh post-pandemic reality check. Its meteoric rise from humble beginnings to the country’s most valuable tech startup has come to a screeching halt, and the company’s future remains clouded in uncertainty.