Some of India’s biggest startups are taking a haircut in their valuations, at least in the eyes of their investors, while some lenders are adjusting their estimates amid the weakening global economy.
BlackRock has slashed the valuation of Byju’s, India’s most valuable startup at $22 billion, by nearly half to $11.5 billion, according to documents accessed by businesskinda.com. Indian news channel The bow First reported about the downgrade.
Swiggy, India’s most valuable $10.7 billion food delivery start-up, has been downgraded by Invesco to a valuation of around $8 billion, according to U.S. fund disclosures, reviewed by businesskinda.com.
Byju raised capital last year at a valuation of $22 billion and has added more funding in recent quarters on a convertible bond with the previous valuation as the limit, according to people familiar with the matter. BlackRock made the disclosure about its valuation adjustment of the Indian edtech giant in its 2022 annual report to shareholders.
Swiggy climbed to a valuation of $10.7 billion in a round led by Invesco itself in January 2022. By the end of October, the Atlanta-based company had downgraded its Swiggy holdings, valuing the company at around $8 billion, so evidenced by filings.
The valuation cuts add a new dimension to the impact of deteriorating market conditions on Indian startups. Funding activity in the Indian startup ecosystem slowed last year, but as many of the larger startups raised capital with convertible bonds (thus pushing price discovery to a later date) or raised no capital at all, their latest valuations have remained largely unchanged.
Masayoshi Son, founder and CEO of SoftBank Group, alluded to this trend last year when he warned that the funding winter for startups could prolong as some unicorns were unwilling to accept lower valuations in new funding deliberations.
However, it is important to note that investors value the equity of their existing portfolio startups in different ways and that a lender’s value adjustment, however remarkable, does not necessarily represent the opinion of other investors – and sometimes that of the startups themselves .
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