One of Byju’s biggest investors, Prosus, said on Monday that he believes his stake in the Indian ed-tech startup is now worth nothing, but remains hopeful that India’s formerly most valuable 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 was now worth zero “due to the significant decline in value to equity investors.” The company remains optimistic about Byju’s prospects, but improving management at the Indian company will be key, Erwin Tu, head of IT at Prosus Group, said on an earnings call.
The Indian edtech giant has had a difficult couple of years as it grappled with a series of financial and management setbacks that tarnished its reputation and put its future in jeopardy. The startup’s problems were magnified last year when it failed to meet financial reporting deadlines, ultimately reporting revenues far below its expectations.
The financial missteps were exacerbated by the sudden departure of auditors and board members, including Prosus’ CEO, scuttling a potential $1 billion fundraising effort. Desperate for capital, the startup raised $200 million this year, but at a significantly reduced valuation from about $225 million to $250 million. This lifeline has also been embroiled in legal disputes with some of Byju’s biggest backers, including Prosus.
Prosus, whose portfolio includes high-profile companies such as Tencent, Delivery Hero, Swiggy and Stack Overflow, has invested more than $570 million in Byju’s over the years. It has never sold any shares in the Indian ed-tech startup, whose valuation rose to a peak of $22 billion in early 2022. Prosus said Monday that its stake in Byju’s now represents a fair value loss of $498 million, after adjusting , at its current value. fiscal year.
Prosus also reduced the value of its other investments: it reduced the value of its stake in Stack Overflow, which it bought for $1.8 billion in 2021, by 39%, and reduced the value of its stake in the Indian online pharmacy, PharmEasy. By 35%.
The company’s reshuffle of Byju’s stake comes after BlackRock, the world’s largest asset manager, wrote off its stake in the Indian education technology startup. Brosus complained last year that Byju’s had “regularly ignored advice” from the company.