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<ul class="summary-list"><li>BlackRock has written off its investment in once-hot Indian tech company Byju.</li><li>The Indian education tech giant is facing legal and financial troubles.</li></ul>In another blow to education tech giant Byju's, investor BlackRock says its stake in the once-hot company is worth nothing.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, <a target="_blank" href="https://techcrunch.com/2024/01/11/blackrock-cuts-byjus-valuation-by-95-to-1-billion/">TechCrunch reported.</a>BlackRock invested in Byju's parent Think &amp; Learn through <a target="_blank" href="https://www.blackrock.com/us/individual/literature/first-quarter-report/fqr-retail-blackrock-science-and-technology-trust.pdf">various</a> <a target="_blank" href="https://www.blackrock.com/us/individual/literature/investor-education/bcat-commentary.pdf">funds</a>, all of which appear to have written off the investment in recent filings.HSBC, which is not an investor in Byju's, said in a recent research note 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."We assign zero value to Byju's stake amid multiple legal cases and funding crunch. Previously, we valued ~10% stake in Byju's by applying 80% discount to the latest publicly disclosed valuation," the HSBC analyst wrote.The Bengaluru-based company is facing significant turmoil.Earlier this week, a group of lenders asked a US court to initiate bankruptcy proceedings against Byju's subsidiaries <a target="_blank" href="https://www.business-standard.com/technology/tech-news/byju-s-now-worth-zero-hsbc-warns-prosus-amid-legal-financial-troubles-124060700146_1.html">over a $1.2 billion loan.</a> The company also <a target="_blank" href="https://inc42.com/buzz/byjus-slashes-salaries-for-new-sales-hires-by-more-than-90/">cut the salaries</a> of new sales hires by 90% in an attempt to cut costs, local outlet Inc42 <a target="_blank" href="https://inc42.com/buzz/byjus-slashes-salaries-for-new-sales-hires-by-more-than-90/">reported</a> on Thursday.Byju's investors, including Prosus, are <a target="_blank" href="https://www.business-standard.com/companies/news/byju-s-egm-shareholders-vote-to-remove-ceo-raveendran-and-his-family-124022300919_1.html">seeking the removal of its CEO</a>, 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<a target="_blank" href="https://www.bloomberg.com/news/articles/2023-07-26/star-founder-broke-down-in-tears-as-crises-engulfed-byju-s"> go public through a SPAC deal</a> in 2022, which did not ultimately pan out.Byju's and BlackRock did not immediately respond to requests for comment.Correction: This story has been updated to reflect that HSBC wrote about an investor's interest in Byju's. HSBC did not invest in Byju's.

India's once-hot startup Byju's was valued at $22 billion. Now, BlackRock says its investment is worth nothing.

New Delhi, In a determined pursuit of a fair resolution, education technology giant <keyword id="6384897" type="General" weightage="20" keywordseo="BYJUS" source="Orion">BYJU'S</keyword> finds itself pushing back against "unrealistic and unacceptable terms" made by its US lenders of Term Loan B (TLB) during the ongoing renegotiation of their contract. The lenders, employing the threat of litigation, have exerted pressure on BYJU'S to drastically alter the core of the contract, which had been agreed upon in 2021. Despite BYJU'S willingness to step up to a higher interest rate and offer partial payment of the principal, the lenders proceeded with litigation, intensifying the ongoing back-and-forth between the two parties. BYJU'S has maintained a flawless track record of meeting its interest payments without any defaults. The situation between BYJU'S and a group of its hawkish TLB lenders, who trade in distressed debt, highlights the challenges faced by startups navigating the complex and opportunistic world of finance, where negotiations can quickly turn adversarial. As a non-operative entity in the United States, BYJU'S Alpha, a subsidiary of BYJU'S, has become the target of the lenders' legal actions. BYJU'S Alpha was solely created as a borrowing entity, to facilitate the borrowing process of the TLB. "The genesis of this conflict lies in the renegotiation of the TLB contract, which was signed in good faith by both parties in 2021. However, the lenders' subsequent demands have been nothing short of egregious. As a global leader in <keyword id="1464841" type="General" weightage="50" keywordseo="edtech" source="Orion">edtech</keyword>, BYJU'S has decided to take a stand against these unreasonable tasks, demonstrating its unwavering commitment to safeguarding the interests of its stakeholders," explained a source close to the legal proceedings on the condition of anonymity. "This litigation is specific to BYJU'S Alpha, which is a non-operative US entity of BYJU'S with no employees. No Indian entity is a party to these proceedings," the source clarified. BYJU'S maintains that it has consistently met all its financial and fiduciary obligations. As evidence of its financial strength, BYJU'S recently concluded a successful funding round, securing a remarkable $250 million. The company is reportedly on the verge of closing an even larger funding round in the coming weeks, further solidifying its financial position. Recognising the importance of maintaining financial prudence and protecting the long-term interests of the company, BYJU'S recently offered to pay a much higher interest rate along with a partial payment of the principal. These concessions demonstrated the company's willingness to find a middle ground and maintain a constructive relationship with its lenders. However, the lenders remained unmoved, proceeding with litigation against BYJU'S Alpha. The litigants have also made a bewildering claim suggesting that BYJU'S "moved" $500 million from BYJU'S Alpha, alleging a breach of the existing arrangement. BYJU'S has vehemently denied this "baseless" allegation, emphatically stating that it has meticulously adhered to the terms of its contractual obligations, in complete compliance with the agreed-upon rights and responsibilities outlined in the contract. It is crucial to underscore that BYJU'S entered into the TLB agreement in 2021 with a clear and mutually-agreed upon objective of utilising the capital raised for driving growth and expansion in its global operations. The very essence of BYJU'S commitment to the lenders was to deploy the funds to fuel the advancement of its business objectives. The decision to file a case against a non-operative entity suggests a calculated move by the lenders, aiming to exert pressure on BYJU'S and potentially force them to capitulate to their demands. Industry observers view it as an attempt to intimidate BYJU'S and bring them back to the negotiating table on unfavourable terms. Flush with funds, BYJU'S is unlikely to accede to such tactics and remains steadfast in its commitment to pursuing fair negotiations that align with its long-term strategic goals. The event serves as a stark reminder of the potential pitfalls faced by Indian companies raising capital in the US and underscores the need for transparent and fair lending practices. The ability of the EdTech giant to emerge stronger in this renegotiation with its lenders will undoubtedly have a profound impact on the global growth trajectory of India's EdTech industry. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/battlegrounds-mobile-india-to-return-soon-company-receives-permission-from-government/articleshow/100346259.cms">Battlegrounds Mobile India is relaunching soon, but government says final call only after a 3-month trial</a> <a href="https://www.businessinsider.in/tech/mobile/news/redmi-a2-and-a2-plus-with-android-13-go-edition-launched-starting-at-6299/slidelist/100352302.cms">Budget friendly Redmi A2 and A2 Plus with Android 13 (Go) launched at ₹6,299</a> <a href="https://www.businessinsider.in/sports/news/virat-kohli-and-these-players-have-more-than-three-ipl-centuries/slidelist/100348738.cms">Virat Kohli and these players have more than three IPL centuries</a>

BYJU'S challenges lenders' unrealistic terms amid contract renegotiations

<keyword id="1464841" type="General" weightage="50" keywordseo="edtech" source="Orion">Edtech</keyword> giant <keyword id="2900267" type="General" weightage="80" keywordseo="byju" source="Orion">BYJU</keyword>'s on Wednesday said that the $1 billion acquisition process of <keyword id="3406091" type="General" weightage="50" keywordseo="aakash-educational-services" source="Orion">Aakash Educational Services</keyword> is on track and is expected to be completed by August. BYJU's acquired Delhi-based offline test preparatory services provider <keyword id="6380190" type="General" weightage="100" keywordseo="aakash" source="Orion">Aakash</keyword> for $1 billion last year. The company was reacting to reports that Blackstone and other shareholders of Aakash are yet to be paid in both cash and stock as it has deferred the payment. A company spokesperson told IANS that the acquisition of "Aakash is fully on track and all payments are expected to be completed by the agreed upon date, i.e., August 2022". "Aakash is our most successful acquisition till date and we are very proud to have them in our fold," the company spokesperson added. "Along with all our group companies, we continue to be perfectly poised to provide access to quality education in all learning segments from early learning to exam prep and career success, the spokesperson said. Aakash Educational Services provides test preparation services for medical and engineering entrance exams, school/board exams, and other exams via Aakash Centres. The edtech unicorn made at least 10 acquisitions for a cumulative transaction value of about $2.5 billion last year. The latest development at BYJU's comes as the Indian edtech market is shrinking with reopening of schools, colleges and physical tuition centres. Led by the edtech platforms like Unacademy, <keyword id="8080458" type="General" weightage="50" keywordseo="whitehat-jr" source="Orion">WhiteHat Jr</keyword>, <keyword id="2016957" type="General" weightage="50" keywordseo="vedantu" source="Orion">Vedantu</keyword>, FrontRow, Udayy, Lido Learning and others, over 10,000 start-up employees have been laid off in the country. In April, Unacademy laid off nearly 600 employees, contractual workers and educators, about 10 per cent of its 6,000-strong workforce across the group. In June, Unacademy said that a small fraction of its workforce (2.6 per cent or nearly 150 employees) was asked to go as part of a performance improvement programme (PIP). ALSO SEE <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/startups/news/razorpay-rejigs-top-leadership-team-after-cofounder-moves-out-of-cto-role/articleshow/92537894.cms">Razorpay rejigs top leadership team after cofounder moves out of CTO role</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/ecommerce/news/after-groceries-in-10-minutes-most-indians-want-their-shoes-delivered-in-2-hours/articleshow/92539964.cms">After groceries in 10 minutes, most Indians want their shoes delivered in 2 hours</a>

Byju's says Aakash acquisition on track after reports that it has failed to pay  up

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India's once-hot startup Byju's was valued at $22 billion. Now, BlackRock says its investment is worth nothing.

Shubhangi Goel

BYJU'S challenges lenders' unrealistic terms amid contract renegotiations

IANS

Byju's says Aakash acquisition on track after reports that it has failed to pay up

IANS

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