Prosus, one in every of Byju’s largest traders, on Monday stated its once-$2.1 billion price stake within the Indian edtech startup is now price nothing, however it’s nonetheless hopeful that the previously most-valuable Indian startup will be salvaged.
The biggest exterior investor in Byju’s with a 9.6% stake, Prosus stated in its quarterly report that its stake within the startup is now price zero “because of the vital lower in worth for fairness traders.” Prosus Group CIO, Erwin Tu, stated on an earnings name that the agency remains to be hopeful about Byju’s outlook, however bettering governance on the Indian agency can be key.
The Indian edtech big has had a troublesome couple of years because it grappled with a sequence of monetary 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 fulfill monetary reporting deadlines and in the end reported revenues well below its own projections.
The monetary stumbles have been compounded by the sudden departures of its auditor and board members, together with a Prosus government, and scuttled a potential $1 billion fundraising effort. In a determined bid for capital, the startup raised $200 million this year, however at a drastically diminished valuation of about $225 million to $250 million. This lifeline has additionally been entangled in legal 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 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 stated its stake in Byju’s now represented a good worth lack of $493 million, after the adjustment, in its present monetary 12 months.
Prosus has additionally lower 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 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 in the Indian edtech startup. Prosus final 12 months complained that Byju’s had “frequently disregarded recommendation” from it.
