02 March 2024 – In a significant development, Macquarie Capital is reportedly devaluing its investment in Byju’s by approximately 98%, following concerns raised by Swiss bank Julius Baer Group. The move comes as Julius Baer questioned the fees charged by Byju’s, citing an inflated and outdated valuation.
Byju’s Valuation Background:
Julius Baer’s clients had invested in Byju’s through a feeder fund linked to a Macquarie vehicle holding the stake. This move by Macquarie Capital reflects a significant skepticism about the valuation of Byju’s and its impact on the investment’s worth.
Macquarie Capital is reportedly reducing the value of its stake in Byju’s by about 98%, marking a substantial devaluation. The edtech firm received a significant investment from Macquarie Capital in 2021, amounting to hundreds of millions of dollars. The devaluation is a response to concerns raised by Julius Baer Group regarding the fees charged by Byju’s, which are allegedly based on an inflated and outdated valuation.
Byju’s Founder’s Statement:
Byju Raveendran, the founder of Byju’s, addressed the workforce in a letter, stating that the recent funds raised through a rights issue are currently inaccessible due to a legal dispute with certain investors. Despite the successful closure of the rights issue, Raveendran mentioned that the company is unable to process employee salaries at present. He assured that efforts are underway to resolve the situation, to pay salaries by March 10.
Conclusion:
The devaluation of Byju’s by Macquarie Capital, influenced by concerns raised by Julius Baer Group, adds a layer of complexity to the financial landscape of the prominent edtech firm. The controversy surrounding fees and valuation may have broader implications, influencing investor confidence and shaping Byju’s future financial endeavors. Byju Raveendran’s commitment to resolving the salary payment issue underscores the challenges the company is navigating in the wake of the financial dispute.
