A big investor in Byju, Prosus, said on Monday that its once-$2.1 billion stake in the Indian edtech startup is now worth nothing. However, it is still hoping that the once-most-valuable Indian startup can be saved.
Prosus, which has a 9.6% stake in Byju’s and is the other big outside investor, said in its quarterly report that its stake in the startup is now worth nothing “due to the significant decrease in value for equity investors.” Erwin Tu, CIO of Prosus Group, said on an earnings call that the company is still optimistic about Byju’s future, but that the Indian company needs to improve its governance.
The Indian edtech giant has had a rough couple of years. It has had a string of financial and management problems that have hurt its image and put its future at risk. The startup’s problems got worse last year when it missed dates for filing its finances and said that its earnings were much lower than expected.
The sudden departures of its auditor and board members, including a Prosus executive, made the company’s financial problems even worse. They also stopped a possible $1 billion fundraising attempt. The company raised $200 million this year in a last-ditch effort to get money, but only at a much lower value of $225 million to $250 million. Along with Prosus and some of Byju’s biggest backers, this lifeline has also been in court battles with them.
Prosus has put more than $570 million into Byju’s over the years. Some of the well-known companies that Prosus has invested in are Tencent, Delivery Hero, Swiggy, and Stack Overflow. The Indian tech company has never sold any shares in the company, which was worth a high of $22 billion in early 2022. After the change, Prosus said on Monday that its share in Byju’s had lost $493 million in value for the current financial year.
The value of Prosus’s other interests has also gone down. It has cut its stake in Stack Overflow, which it bought for $1.8 billion in 2021, by 39%, and its stake in PharmEasy, an Indian online pharmacy, by 35%.
Also Read: Blackrock Took a Stake in Byju’s That Was Worth $22 Billion and Made It Worth Nothing
Following BlackRock’s decision to write off its own share in the Indian edtech startup, the company changed its mind about Byju’s. In the past year, Prosus said that Byju’s had “regularly disregarded advice” from it.
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