Prosus, certainly one 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 will 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 “as a result of vital 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 enhancing 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 had been amplified final yr when it failed to satisfy monetary reporting deadlines and finally reported revenues effectively under its personal projections.
The monetary stumbles had 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 lowered 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.
The South African-Dutch investor, whose portfolio contains high-profile firms like Tencent, Supply Hero, Swiggy and Stack Overflow, has invested greater than $570 million in Byju’s over time. 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.
Prosus has additionally lower down the worth of its different investments: It lowered 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 yr complained that Byju’s had “often disregarded recommendation” from it.
