Prosus withdraws its 9.6% stake in Byju’s

Prosus, one among Byju’s biggest investors, said on Monday that its once-worth $2.1 billion stake in the Indian edtech startup is now price nothing, nevertheless it still hopes to save lots of what was once India’s most precious startup.

Prosus, the biggest outside investor in Byju’s with a 9.6% stake, said in its quarterly report that its stake in the startup is now price zero “due to the significant decline in value to equity investors.” Prosus Group CIO Erwin Tu, on an earnings call, said the corporate stays hopeful about Byju’s prospects, but improving management on the Indian company shall be key.

The Indian edtech giant has had a difficult few years, coping with a series of economic and management setbacks which have tarnished its fame and threatened its future. The startup’s problems intensified last 12 months when it missed financial reporting deadlines and ultimately saw revenue well below its own projections.

The financial stumbles were compounded by the sudden departure of the auditor and board members, including a Prosus executive, and derailed a possible $1 billion fundraising effort. In a desperate try and raise capital, the startup raised $200 million this 12 months, but at a drastically reduced valuation from around $225 million to $250 million. This lifeline has also been embroiled in legal disputes with a few of Byju’s biggest sponsors, including Prosus.

Prosus, whose portfolio includes well-known corporations comparable to Tencent, Delivery Hero, Swiggy and Stack Overflow, has invested over $570 million in Byju’s over time. He never sold any shares in the Indian edtech startup, whose valuation peaked in early fiscal 2022.

Prosus also reduced the worth of its other investments: it reduced the worth of its stake in Stack Overflow, which it bought for $1.8 billion in 2021, by 39%, and reduced the worth of its stake in Indian online pharmacy PharmEasy, by 35%.

Byju’s stake adjustment comes after BlackRock, the world’s largest asset manager, also wrote down its stake in the Indian edtech startup. Last 12 months, Prosus complained that Byju’s “regularly disregarded his advice.”