Largest Investor Loses $493 Million in Value
Prosus, one of Byju’s largest investors, has written off its entire stake in the Indian edtech startup. According to the company’s quarterly report, the value of Prosus’ 9.6% stake in Byju’s has decreased significantly, making it worthless.
A Difficult Year for Byju’s
Byju’s has been facing significant challenges over the past year. The startup has grappled with financial and governance issues, including a series of departures of key executives and auditors. These setbacks have led to a decrease in its valuation from $22 billion in early 2022 to around $225-250 million.
A Series of Setbacks for Byju’s
- Financial Reporting Issues: Byju’s failed to meet financial reporting deadlines, leading to concerns about the company’s financial health.
- Departures of Key Executives and Auditors: The startup has seen a series of high-profile departures, including its auditor and several board members. This includes a Prosus executive who was part of the Byju’s board.
- Failed Fundraising Efforts: Byju’s attempted to raise $1 billion but ultimately secured only $200 million at a drastically reduced valuation.
Prosus’ Stake in Byju’s
Prosus has invested over $570 million in Byju’s, making it the largest external investor. The company has maintained that its stake is still worth something despite writing off the value. Prosus Group CIO, Ervin Tu, expressed hope for Byju’s future but emphasized the need for improved governance at the Indian startup.
Other Investments Affected
Prosus has also adjusted the value of its other investments:
- Stack Overflow: The company reduced the value of its stake in Stack Overflow by 39%, from $1.8 billion to around $1.1 billion.
- PharmEasy: Prosus lowered the worth of its stake in Indian online pharmacy, PharmEasy, by 35%.
BlackRock Writes Off Stake as Well
Byju’s has also lost another key investor, with BlackRock writing off its stake in the startup.
A Dark Time for Byju’s
Byju’s struggles have been well-documented. The company’s financial and governance issues have led to a significant decline in its valuation. Prosus’ write-off of its stake is a testament to these challenges.
The Road Ahead
While Prosus remains hopeful about Byju’s future, the company must address its governance issues and improve its financial health if it hopes to recover from this difficult period.
Key Takeaways
- Byju’s valuation has plummeted due to various setbacks.
- Prosus has written off its entire stake in the Indian edtech startup.
- Improved governance is crucial for Byju’s recovery.