BlackRock, a minority investor in Byju’s, has cut the valuation of the Indian startup by around 62% to $8.4 billion. Despite this, Byju continues to raise capital at a higher price and recently secured $250 million in fresh funding at a valuation cap of $22 billion. Other investors may have different valuation methodologies, and the reductions highlight the impact of global market conditions on Indian startups. Funding activity declined last year, but some startups maintained their valuations through convertible notes or by not raising funds.
BlackRock, a minority investor in the Bengaluru-based startup Byju’s, has reduced its valuation of the company by nearly two-thirds to approximately $8.4 billion. This comes despite Byju’s ability to attract capital at a higher price and maintain its status as India’s most valuable startup.
In a recent filing, BlackRock disclosed that it had lowered the value of its shares in Byju by about 62% compared to the previous year. This is a significant reduction considering that BlackRock had already slashed Byju’s valuation to $11.5 billion in October of the previous year. Byju’s declined to comment on the matter.
It is important to note, however, that BlackRock does not hold a substantial stake in Byju’s, owning less than 1% equity in the startup. Therefore, the impact of this valuation adjustment may be limited. Different investors may also have varying valuation methodologies, so other portfolio investors might hold different views.
Prosus, another prominent investor in Byju’s, would have caused more concern if it had made a similar move. Nevertheless, Byju’s recently secured $250 million in fresh funding at a valuation cap of $22 billion, indicating that other backers still value the startup higher.
BlackRock’s valuation adjustment adds to a series of markdowns affecting the Indian startup ecosystem. Invesco, for example, has halved the valuation of Swiggy, while investors have also lowered the valuations of Pine Labs, Ola, and PharmEasy.
These recent reductions in valuations shed light on the impact of global market conditions on Indian startups. Last year, funding activity in the Indian startup ecosystem declined. However, many larger startups maintained their valuations either by raising capital through convertible notes, which defers price discovery to a later stage, or by choosing not to raise funds at all.