One in every of Byju’s largest traders, Prosus, stated on Monday that it believes its stake within the Indian edtech startup is now nugatory, but it surely nonetheless hopes that what was India’s most beneficial startup could be saved.
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 nil “resulting from a big discount in worth to fairness traders.” Prosus Group CIO Erwin Tu stated on an earnings name that the agency stays bullish on Byju’s prospects, however bettering governance on the Indian agency shall be key.
The Indian edtech big has had a troublesome few years because it grappled with a collection of monetary and administration failures that tarnished its popularity and put its future in jeopardy. The startup’s woes intensified final 12 months when it failed to fulfill monetary reporting deadlines and ended up reporting income nicely beneath its personal forecasts.
The monetary issues have been compounded by the sudden departure of the auditor and board members, together with the pinnacle of Prosus, and derailed a possible $1 billion fundraising effort. In a determined bid to boost capital, the startup raised $200 million this 12 months, however at a sharply lowered valuation from about $225 million to $250 million. This lifeline has additionally been embroiled in litigation with a few of Byju’s largest supporters, together with Prosus.
Prosus, whose portfolio contains well-known firms resembling Tencent, Supply Hero, Swiggy and Stack Overflow, has invested greater than $570 million in Byju over time. He by no means offered any shares within the Indian edtech startup, whose valuation peaked at $22 billion in early 2022. Prosus stated on Monday that its stake in Byju’s now represents a $498 million loss in honest worth after adjusting for the present interval. fiscal 12 months.
Prosus additionally reduce the worth of its different investments: it reduce the worth of its stake in Stack Overflow, which it acquired for $1.8 billion in 2021, by 39%, and it additionally reduce the worth of its stake in Indian on-line pharmacy PharmEasy. , by 35%.
The agency modified its stake in Byju after BlackRock, the world’s largest asset supervisor, additionally wrote off its stake within the Indian edtech startup. Final 12 months, Prosus complained that Byju’s “recurrently disregards recommendation” from him.