Top U.S. Funds Mark Down Investment In Swiggy, Byju's

Top U.S.-based investment funds such as BlackRock Inc. and Invesco Ltd. have marked down the value of their investments in two of India's most prominent startups—Byju's and Swiggy.

BlackRock valued the shares of Think & Learn Pvt.—the parent company of Byju's—at around $4,300 apiece, or Rs 3,56,000 each, giving it a valuation of $24.2 billion as of July 1, 2022, according to data from Tracxn Technologies.

However, as of March 29, 2023, the value of each share of the Byju Raveendran-led edtech firm has fallen to about $2,400, or Rs 1,97,000 apiece, according to filings with the U.S. Securities and Exchange Commission. The company has a value of about $11.3 billion, which has halved in less than a year.

The markdown by BlackRock, one of Byju's most prominent backers, has come over a period of time where the edtech failed to set out on a path of profitability, reporting a loss of Rs 4,588 crore in FY21 with a revenue of Rs 2,430 crore. This was a thirteen-fold rise in loss for the startup, which it filed in a much delayed audited financial statement.

The group had also cut about 2,500 jobs in October as part of efforts to cut costs and put out a statement saying that it has "embarked on a path to achieve group-level profitability" by March 2023.

Swiggy, which is operated by the Bengaluru-based Bundl Technologies Pvt., also saw a cut in its valuation, though not as sharp as Byju's.

Invesco holds around 2% of a stake in Swiggy via three funds, according to Tracxn data. As of July 2022, the valuation stood at $9.4 billion.

However, in a round led by Invesco in January 2022, Swiggy raised about $700 million at a $10.7 billion valuation. The investor valued Swiggy at about $8 billion, according to filings accessed by TechCrunch. This is a markdown of about 25% in just over a year.

Burgeoning tech valuations have come tumbling down across the globe after a bumper 2021. Soaring concerns such as inflation, the Russia-Ukraine war, and the delayed path to profitability for several Indian startups have caused valuations to come down considerably.

The reduction in demand for technology as the world opened up post-pandemic also led to founders and investors adjusting to a much different reality.

Queries sent to Swiggy and Byju's did not receive a response at the time of publishing this story.

The markdown in Byju's valuations was first reported by The Arc.