Posts tagged: valued

An Indian tribunal court on Tuesday initiated insolvency proceedings for Byju’s, once India’s most valuable startup, in response to a petition from the country’s cricket board. The ruling effectively installs an interim resolution professional who will manage the company’s operations, pushing the startup’s founder out.

The National Company Law Tribunal’s ruling (PDF) came in response to a petition from the Board of Control for Cricket in India (BCCI), which is seeking to recover nearly $19 million from the Bengauluru-headquartered edtech startup. Byju’s had previously sponsored the Indian cricket team.

The tribunal has invited creditors, employees and vendors to file claims against the embattled firm. “The existence of a debt and a default in the payment of debt is clearly established,” the court stated.

Byju’s can appeal the decision and has said it wishes to “reach an amicable settlement with BCCI.” A Byju’s spokesperson added: “In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests.”

The court order is the latest of a long series of crises that have engulfed Byju’s over the past two years. The company’s troubles began to surface when it missed financial reporting deadlines two years ago and fell short of revenue projections by more than 50%.

The edtech startup is mired in governance issues, its top investors, including Prosus and Peak XV, have alleged. The investor group is also separately legally fighting with Byju’s and seeking the removal of its founder, Byju Raveendran. The startup’s board members and auditor resigned in protest last year.

The fight between the investor group, which includes Sofina and Chan Zuckerberg Initiative, escalated earlier this year after Byju’s reduced the company’s valuation to a mere $25 million to raise capital via a rights issue.

A recent court order restrained Byju’s from proceeding with its second rights issue. BlackRock, a minority investor in Byju’s, has also written down the value of its investment in Byju’s to zero.

Oyo, the Indian budget-hotel chain startup, is finalizing a fresh fundraise of about $100 million to $125 million that slashes its valuation to $2.5 billion, two people familiar with the matter told TechCrunch. 

That’s a steep decline in the Gurgaon-headquartered startup’s value, which was worth $10 billion in 2019. The startup, struggling to raise from institutional investors, has been aggressively pitching high-net-worth individuals in recent months.

“We genuinely feel that this asset makes a lot of sense today. Being profitable and @70% discount to the previous valuation. Listing expected in 18-24 months,” a representative of InCred, a financial firm working with Oyo, pitched in a message (seen by TechCrunch) to a startup founder.

TechCrunch reported early last month that Oyo was seeking to raise funds at a $3 billion valuation or lower. At the time, Oyo vehemently denied the “rumors, including that of the valuation.” The new round is likely to grow bigger in size, said the aforementioned sources, who requested anonymity as the matter isn’t public.

The new funding follows Oyo shelving its plan for an IPO last month. The startup — which counts SoftBank, Peak XV Ventures, Lightspeed, Airbnb and Microsoft among its backers — has withdrawn its IPO application from the Indian markets regulator the Securities and Exchange Board of India twice in the last four years. 

Oyo had initially filed paperwork with SEBI in 2021 for a public listing but withdrew it and refiled in 2023. The firm, which has raised over $3 billion to date, sought to raise $1.2 billion at a valuation of $12 billion in the IPO in 2021. 

Once one of the hottest Indian startups, Oyo operates an OS of sorts to help hoteliers accept digital bookings and payments. The startup was once operational in dozens of markets, including the U.S. and Europe, but has since curbed its international play.

It observed a net profit of $12 million in the financial year ending March, according to founder and chief executive Ritesh Agarwal.

Agarwal in 2019 took a $2 billion debt to increase his stake in Oyo, valued at $10 billion at the time. He invested $700 million as primary capital in Oyo and spent $1.3 billion on a secondary purchase of Oyo shares. The startup has not commented on the status of that debt since.

Indian newspaper Economic Times also reported about the new funding on Monday, adding that the startup will seek approval from existing shareholders for the funding this week.

An Indian tribunal court on Tuesday initiated insolvency proceedings for Byju’s, once India’s most valuable startup, in response to a petition from the country’s cricket board. The ruling effectively installs an interim resolution professional who will manage the company’s operations, pushing the startup’s founder out.

The National Company Law Tribunal’s ruling (PDF) came in response to a petition from the Board of Control for Cricket in India (BCCI), which is seeking to recover nearly $19 million from the Bengauluru-headquartered edtech startup. Byju’s had previously sponsored the Indian cricket team.

The tribunal has invited creditors, employees and vendors to file claims against the embattled firm. “The existence of a debt and a default in the payment of debt is clearly established,” the court stated.

Byju’s can appeal the decision and has said it wishes to “reach an amicable settlement with BCCI.” A Byju’s spokesperson added: “In the meantime, our lawyers are reviewing the order and will take necessary steps to protect the company’s interests.”

The court order is the latest of a long series of crises that have engulfed Byju’s over the past two years. The company’s troubles began to surface when it missed financial reporting deadlines two years ago and fell short of revenue projections by more than 50%.

The edtech startup is mired in governance issues, its top investors, including Prosus and Peak XV, have alleged. The investor group is also separately legally fighting with Byju’s and seeking the removal of its founder, Byju Raveendran. The startup’s board members and auditor resigned in protest last year.

The fight between the investor group, which includes Sofina and Chan Zuckerberg Initiative, escalated earlier this year after Byju’s reduced the company’s valuation to a mere $25 million to raise capital via a rights issue.

A recent court order restrained Byju’s from proceeding with its second rights issue. BlackRock, a minority investor in Byju’s, has also written down the value of its investment in Byju’s to zero.

ZestMoney, the Goldman Sachs-backed Indian fintech startup once valued at $450 million, has sold itself to financial services firm DMI Group, the two said late Wednesday, in a fire sale that caps 12 tumultuous months for the once-hot new-age lender.

The two firms didn’t disclose the terms of the deals, but a person familiar with the situation said the acquisition is largely a way for DMI to poach and retain talent and that every investor in ZestMoney lost money.

In a statement, DMI Group said the deal grants it with the exclusive right to the use of all Zest brands and make the NBFC arm DMI Finance a preferred lender on the Zest platform. DMI also plans to offer its customers ZestMoney’s checkout financing platform. “DMI will also bring its customer base, balance-sheet strength and significant risk-management experience to drive growth across Zest’s online and offline merchant network,” DMI said in a statement.

News about the acquisition follows ZestMoney — a buy now, pay later platform whose ability to underwrite small ticket loans to first-time internet customers attracted many high-profile investors — announcing last month that it would be shutting down the startup.

ZestMoney founders quit the startup in May last year after acquisition talks with fintech giant PhonePe didn’t materialize. The founding team handed over the firm to three new leaders, who raised a few million dollars from existing investors and attempted to find a new path for the company.

The Bengaluru-headquartered startup — which identified PayU, Quona, Zip, Omidyar Network and Ribbit Capital among its backers — employed about 150 people and had raised over $130 million in its eight-year journey.

“ZestMoney has been a pioneering provider of checkout finance in India. We are always looking for best-in-class solutions to enhance both the engagement with – and the experience of – our customer and merchant base,” said Shivashish Chatterjee, co-founder and joint MD of DMI, in a statement. “We have been partnered with ZestMoney for 8+ years in various capacities. We firmly believe that this acquisition will be an important step in our journey to provide digital financial inclusion at scale across India.”