Byju’s valuation hits zero

The creator of Byju’s, Byju Raveendran, has acknowledged that his startup currently has no net value.

“The business has no value. Which value are you referring to? It is zero,” Raveendran said reporters late on Thursday night via video conference from Dubai. Byju’s, which was valued at $22 billion in 2022, was formerly the most valuable start-up in India.

While some observers attributed the business’s bad performance to its aggressive inorganic expansion, Raveendran stated the corporation “overestimated potential growth, entered (a) lot of markets together.” It was a little too much, too quickly.

“Investors brought in the majority of the deals, and we went beyond. Our investors wanted us to debut jointly in 40 countries. Investors rejoiced with our successful $1.2 billion loan offering.
In June 2023, board members for Prosus, Chan Zuckerberg Initiative, and Peak XV Partners tendered their resignations.

The creator of Byju said that the resignations were caused by a loan default lawsuit in a Delware court, as the investors were worried about being held accountable for repaying the $1.2 billion debt.

Through its administrative agency Glas Trust, the lenders of the $1.2 billion Term Loan B (TLB) petitioned the Delaware Court of Chancery, claiming that there had been a payment failure and requesting early payment.

Although Raveendran was optimistic about a rebound after the resolution of the bankruptcy situation, he was quoted in a PTI article as saying, “Our subsidiary has not taken any hits.” We will generate more than ₹5,000 crore in revenue overall. Our primary business is failing and we are having difficulties with it. Even Nevertheless, 200 million children visit our site each month. We must revitalize and redesign.”

Byju’s is now going through insolvency procedures. These started when the BCCI tried to collect their outstanding debt of ₹158.9 crore.

After settling all outstanding debts, the firm resolved its disagreement with the cricket association, and the National firm Law Appellate Tribunal subsequently terminated the insolvency process.

Nevertheless, US lenders, acting via Glas Trust, appealed the NCLAT ruling to the Supreme Court, reinstating the start-up’s bankruptcy procedures.