HSBC believes that $22 billion Byju’s is now worth zero

In a research note, HSBC estimates that the Indian edtech giant Byju’s, once valued at $22 billion, is now worth nothing. The write-down in its estimation makes Byju’s one of the most spectacular startup slides in recent memory.

It follows a very rough year for the Bengaluru-based startup, which was India’s most valuable not long ago. Byju’s struggled to meet its financial reporting deadlines last year, ultimately falling short of its target by over 50% as it faced various governance issues.

Those issues — coupled with abrupt resignations from its auditor and board members — contributed to derailing a $1 billion fundraise deliberation by Byju’s.

Prosus, one of Byju’s largest investors, publicly slammed the startup, alleging it “regularly disregarded advice” from the backer. Amid the funding crunch, Byju’s then raised $200 million at a post-money valuation of about $250 million this year – a funding that is being legally disputed by some of the largest Byju’s investors, including Prosus.

It stands to reason then, that in the research note HSBC also estimated the value of Prosus’ 10% stake in the Indian startup to be zero because of the ongoing legal cases and funding crunch.

The bank also estimated that a number of other startups are not nearly as valuable as they once were.

It estimates that the online pharmacy Pharmeasy should be valued at $2.8 billion (down from a high of $5.6 billion in 2021), social commerce Meesho $2.5 billion (down from $4.9 billion), Indian agritech startup DeHaat $400 million (down from $800 million), and an otherwise unicorn logistics startup ElasticRun $800 million.

The bank estimates that Stack Overflow, a firm Prosus acquired last year for $1.8 billion, should be valued at $900 million and GoodHabitz to $100 million (down from $200 million).

“We apply a 50% discount to the latest funding round/acquisition price for assets where the last round is older than six months to account for the recent correction in similar edtech/SaaS companies’ public sector multiples,” HSBC added.

Byju’s didn’t immediately respond to a request for comment outside business hours.