$3 billion is 86% less than BYJU’s $22 billion valuation from the previous year due to the company’s cash flow and governance issues.
Another blow to edtech giant BYJU’S came when investor Prosus revealed that the company is currently valued at less than $3 billion.
This is 86% less than the company’s highest valuation of $22 billion from the previous year due to cash flow and governance issues.
Following the resignation of multiple executives and board members and a one-year delay in releasing its FY22 financial reports, Byju’s valuation has just been reduced. This information was revealed by interim CEO Ervin Tu during the Prosus earnings call.
Byju’s valuation has been reduced three times in the last year by shareholders, including Prosus and Blackrock, to $11 billion in March, $8 billion in May, and $5 billion in June.
Prosus did not provide an explanation for the valuation reduction on Wednesday. However, in July, the company stated that management “regularly disregarded advice” despite the former director of the Dutch-listed software business’s continuous attempts to enhance governance.
General Atlantic and Silver Lake are two of Byju’s investors.
Due to the company’s delay in releasing its financial results, three board members and auditor Deloitte resigned in June. Both its chief technology officer and chief financial officer resigned within the last week.
In an attempt to raise money, Byju’s plans to sell off entire company divisions in addition to filing the incomplete but delayed financial statements earlier this month.
According to a report on Tuesday, the Board of Control for Cricket in India hauled BYJU’S before the Bengaluru bench of the National Company Law Tribunal (NCLT) on Tuesday in connection with a disagreement over unpaid invoices pertaining to the Indian cricket team’s sponsorship.
The next hearing between BCCI and BYJU’s parent firm, Think and Learn, has been scheduled for December 22, according to the NCLT website. CNBC TV18 reported on this development, citing sources.
From March 2019 to the end of March 2022, BYJU’S will sponsor the Indian cricket team in place of smartphone company OPPO. BYJU’S then requested that the sponsorship be extended for an extra year, till the end of 2023.
Nevertheless, as the funding freeze hit the Indian startup scene in December 2022, BYJU’S pulled out of their jersey sponsorship agreement with the BCCI. Since then, the startup has faced turbulent times.
Along with the departure of three important board members, the excessive delay in disclosing the financial results also caused auditor Deloitte to resign.
Concurrently, the corporation received a showcause letter from the Enforcement Directorate for allegedly breaking anti-money laundering regulations.
More than 5,000 workers have been let go by BYJU’S since the funding crisis, which has caused a sharp drop in the company’s valuation.
For the fiscal year that ended on March 31, 2022, sales more than doubled to Rs 3,550 crore, while operating losses for For its primary online education business, Think & Learn, the parent company of BYJU, saw a 6% decline to Rs 2,400 crore.