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- HSBC and BlackRock have written off their investments in once-hot Indian tech company Byju.
- The Indian education tech giant is facing legal and financial troubles.
- Investors, including Prosus, are trying to remove CEO Byju Raveendran.
In another blow to education tech giant Byju's, HSBC and BlackRock have both slashed their valuations of the once-hot company down to zero in recent months.
In 2022, the education tech company said it raised $800 million at a $22 billion valuation.
BlackRock was the first investor to publicly signal the company's troubles. In a first-quarter summary for some of its funds, the asset manager valued its stake in Byju's at $0, a number that has not been previously reported. In October, BlackRock slashed its valuation of the startup to less than $1 billion, TechCrunch reported.
BlackRock invested in Byju's parent Think & Learn through various funds, all of which appear to have written off the investment in recent filings.
HSBC similarly cut its valuation to zero in late May, local outlet Business Standard reported on Thursday. Per the outlet, HSBC estimated that Dutch tech investor Prosus' stake in Byju was worth nothing. Prosus owns nearly 10% of the company and invested about $500 million in Byju's.
The valuation drops come after several legal and financial problems for the Bengaluru-based company.
Earlier this week, a group of lenders asked a US court to initiate bankruptcy proceedings against Byju's subsidiaries over a $1.2 billion loan. The company also cut the salaries of new sales hires by 90% in an attempt to cut costs, local outlet Inc42 reported on Thursday.
Byju's investors, including Prosus, are seeking the removal of its CEO, Byju Raveendran, and his family members from the board. The company's India CEO left in April, and it missed filing its 2023 financial reports.
The digital and physical tutoring company was seen as a star in the Indian startup scene and even sponsored the Indian cricket team until 2023. It is backed by the Chan-Zuckerberg Initiative, Sequoia Capital, and Tencent, among others.
Byju's first gained popularity during the pandemic for its unique approach to learning. The company faced challenges in 2022 after students began returning to schools and expensive acquisitions affected its bottom line.
The company planned to go public through a SPAC deal in 2022, which did not ultimately pan out.
Byju's and BlackRock did not immediately respond to requests for comment.