Prosus, one in every of Byju’s largest buyers, on Monday mentioned its once-$2.1 billion value stake within the Indian edtech startup is now value nothing, however it’s nonetheless hopeful that the previously most-valuable Indian startup could be salvaged.
The biggest exterior investor in Byju’s with a 9.6% stake, Prosus mentioned in its quarterly report that its stake within the startup is now value zero “as a result of vital lower in worth for fairness buyers.” Prosus Group CIO, Erwin Tu, mentioned on an earnings name that the agency remains to be hopeful about Byju’s outlook, however bettering governance on the Indian agency will probably be key.
The Indian edtech big has had a tough couple of years because it grappled with a collection of economic and governance setbacks which have tarnished its status and imperiled its future. The startup’s woes have been amplified final 12 months when it failed to satisfy monetary reporting deadlines and in the end reported revenues properly under its personal projections.
The monetary stumbles have been compounded by the sudden departures of its auditor and board members, together with a Prosus govt, and scuttled a possible $1 billion fundraising effort. In a determined bid for capital, the startup raised $200 million this 12 months, however at a drastically diminished valuation of about $225 million to $250 million. This lifeline has additionally been entangled in authorized disputes with a few of Byju’s largest backers, together with Prosus.
Prosus, whose portfolio contains high-profile corporations like Tencent, Supply Hero, Swiggy and Stack Overflow, has invested greater than $570 million in Byju’s over time. It has by no means bought any shares within the Indian edtech startup, whose valuation climbed to a peak of $22 billion in early 2022. Prosus on Monday mentioned its stake in Byju’s now represented a good worth lack of $498 million, after the adjustment, in its present monetary 12 months.
Prosus has additionally minimize down the worth of its different investments: It diminished the worth of its stake in Stack Overflow, which it purchased for $1.8 billion in 2021, by 39%, and has lowered the price of its stake in Indian on-line pharmacy, PharmEasy, by 35%.
The agency’s readjustment of Byju’s stake comes after BlackRock, the world’s largest asset supervisor, additionally wrote off its stake within the Indian edtech startup. Prosus final 12 months complained that Byju’s had “often disregarded recommendation” from it.
