Prosus, a large investor in Byju’s, says its stake in the Indian edtech startup is now price nothing, but it still hopes to save lots of what was once India’s most precious startup.
Prosus, Byju’s largest external investor with a 9.6% stake, wrote off the startup “due to significant decline in value for equity investors,” it revealed in its earnings report on Monday. Prosus Group CIO Erwin Tu, on an earnings call, said the company stays hopeful about Byju’s prospects, but the key to achieving this goal is improving management at the Indian company.
India’s once-celebrated edtech giant has fallen on hard times, grappling with a series of financial and management setbacks that have ruined its status and threatened its future. The startup’s problems intensified last 12 months when it missed financial reporting deadlines and ultimately saw revenues lower than half of those expected.
The financial collapse – compounded by the sudden departure of the auditor and board members, including a Prosus executive – derailed a potential $1 billion fundraising effort, as TechCrunch previously reported. In a desperate try and raise capital, the startup raised a $200 million investment this 12 months, but at a drastically reduced valuation of around $225 million to $250 million. The lifeline has since develop into embroiled in legal disputes with some of Byju’s biggest sponsors, including Prosus.
Prosus, whose notable bets include Tencent, Delivery Hero, Swiggy and Stack Overflow, has invested around $500 million in Byju’s over the years. He has never sold any shares in the Indian edtech startup, which was valued at as much as $22 billion early last 12 months. Prosus reported that the fair value written down for Byju’s in FY24 was $498 million.
Prosus also recorded declines in the value of other investments. Stack Overflow, bought for $1.8 billion, saw a 39% decline. Prosus reported that the value of the group’s shares in the Indian online pharmacy PharmEasy fell by 35%.
The company’s adjustment to Byju’s stake comes after BlackRock, the world’s largest asset manager, also recently wrote down its stake in the Indian edtech startup. Last 12 months, Prosus complained that the Indian startup “regularly disregarded its advice.”