Prosus, one in every of Byju’s largest traders, 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 most important 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 “because of the important lower in worth for fairness traders.” Prosus Group CIO, Erwin Tu, mentioned on an earnings name that the agency continues to be hopeful about Byju’s outlook, however bettering governance on the Indian agency shall be key.
The Indian edtech large has had a troublesome couple of years because it grappled with a collection of monetary and governance setbacks which have tarnished its popularity and imperiled its future. The startup’s woes have been amplified final yr when it failed to fulfill monetary reporting deadlines and in the end reported revenues effectively beneath 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 yr, however at a drastically decreased 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 firms like Tencent, Supply Hero, Swiggy and Stack Overflow, has invested greater than $570 million in Byju’s through the years. It has by no means offered 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 $493 million, after the adjustment, in its present monetary yr.
Picture credit: Prosus (screenshot)
Prosus has additionally minimize down the worth of its different investments: It decreased the worth of its stake in Stack Overflow, which it purchased for $1.8 billion in 2021, by 39%, and has lowered the value 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 yr complained that Byju’s had “recurrently disregarded recommendation” from it.