US-based Baron Capital slashes Byju’s valuation

BENGALURU: US-based asset management company Baron Capital has slashed edtech firm Byju’s valuation. In its June quarter report, it slashed the fair value of the company, valuing the company at about $13 billion. Byju’s was last valued at $22 billion.

Think & Learn Private Limited, the parent entity of Byju’s,  detracted during the quarter. In its report, Baron Capital said, “Weak performance was driven by a marked slowdown in business momentum as COVID-related tailwinds that benefited online/digital education have begun to dissipate. In addition, Byju’s announced that Deloitte had resigned as its auditor and will be replaced by BDO (another top five global  audit firm).”

Three investor-appointed Board Directors resigned during the quarter. These developments were deemed as adverse events that required the fair market value of our holdings to be adjusted down accordingly, it said. It also said they are disappointed with recent developments but it continues to believe that Byju’s remains a dominant franchise and can sustain low to mid-20s earnings growth in coming years.

It made an investment in Think & Learn in second quarter of 2021. Byju’s has been facing many challenges and earlier in June, the Netherlands based Prosus had marked down the firm’s valuation to $5.1 billion.  Prosus, one of the largest investors in the edtech firm, said the leadership at Byju’s “regularly disregarded advice and recommendations relating to strategic, operational, legal, and corporate governance matters.”