Prosus, one of Byju’s largest investors, said on Monday that its $2.1 billion stake in the Indian edtech startup is now worth nothing, but it is still hopeful that the once most valuable Indian startup can be saved. .
Prosus, the largest outside investor in Byju’s with a 9.6% stake, said in its quarterly report that its stake in the startup is now worth zero “due to significant decline in value for equity investors.” Prosus Group CIO Erwin Tu said on an earnings conference call that the company is still hopeful about Byju’s prospects, but that improving governance at the Indian company will be key.
The Indian edtech giant has had a tough couple of years as it dealt with a series of financial and governance setbacks that have tarnished its reputation and jeopardized its future. The startup’s problems were amplified last year when it missed financial reporting deadlines and ultimately reported Income well below its own projections..
The financial setbacks were compounded by the sudden departures of its auditor and board membersincluding a Prosus executive, and derailed a potential billion-dollar fundraising effort. In a desperate bid to raise capital, the startup It raised $200 million this year., but with a drastically reduced valuation of between $225 million and $250 million. This lifesaver has also been entangled in legal disputes with some of Byju’s biggest sponsors, including Prosus.
Prosus, whose portfolio includes high-profile companies like Tencent, Delivery Hero, Swiggy and Stack Overflow, has invested more than $570 million in Byju’s over the years. He has never sold shares in the Indian edtech startup, whose valuation hit a high of $22 billion in early 2022. Prosus said on Monday that its stake in Byju’s now represented a fair value loss of $498 million, after of the adjustment, in its current financial year.
Prosus has also written down the value of its other investments: It has written down the value of its stake in Stack Overflow, which it bought for $1.8 billion in 2021, by 39%, and written down the value of its stake in the Indian pharmacy by PharmEasy line. , by 35%.
The firm’s realignment of Byju’s stake comes after BlackRock, the world’s largest asset manager, also canceled its participation in the Indian educational technology startup. Last year, Prosus complained that Byju’s had “regularly disregarded his advice.”