Some of the biggest Indian startups are taking a haircut in their valuations, at least in the eyes of their investors, as some backers adjust their estimates amid the weakening global economy.
BlackRock has cut the valuation of Byju’s, which is India’s most valuable startup at $22 billion, by nearly half to $11.5 billion, according to filings seen by TechCrunch. Indian news outlet The Arc first reported about the valuation cut.
Swiggy, India’s most valuable food delivery startup at $10.7 billion, has been marked down to a valuation of about $8 billion by Invesco, according to disclosures by the U.S. fund seen by TechCrunch.
Byju’s raised capital last year at a valuation of $22 billion and has topped up more financing in recent quarters on a convertible note with the previous valuation set as the cap, according to people familiar with the matter. BlackRock made the disclosure about its valuation adjustment on the Indian edtech giant in its 2022 annual report to shareholders.
Swiggy climbed to $10.7 billion valuation in a round led by Invesco itself in January 2022. By the end of October, the Atlanta-headquartered firm had slashed the value of its Swiggy holdings and valued the firm at about $8 billion, filings showed.
The valuation cuts add a new dimension to the impact of the dwindling market conditions on the Indian startups. Funding activity in the Indian startup ecosystem slowed down last year, but because many of the larger startups raised capital on convertible notes (and hence pushed the price discovery to a later date) or did not raise capital at all, their last valuations have largely remained unchanged.
Masayoshi Son, founder and chief executive of SoftBank Group, alluded to this trend last year when he cautioned that the funding winter for startups may continue for longer because some unicorns were unwilling to accept lower valuations in fresh funding deliberations.
It’s important to note nonetheless that investors value equity of their existing portfolio startups in different ways and one backer’s value adjustment, however noteworthy, does not necessarily represent the views of other investors — and sometimes those of the startups themselves.