Major investor Prosus has written off the worth of its 9.6% stake in edtech firm Byju’s to zero, but said it continues to fight for a management change at the Indian edtech giant to protect its interests.

Prosus, the largest external investor in Byju’s, wrote off the startup “due to the significant decrease in value for equity investors,” it disclosed in its earnings report Monday. Prosus’s Group CIO Erwin Tu said on an earnings call that the firm is still hopeful about Byju’s outlook but the key to get there is improving governance at the Indian firm.

The once-celebrated Indian edtech giant has fallen on hard times, grappling with a series of financial and governance setbacks that have tarnished its reputation and imperilled its future. The startup’s woes amplified last year when it failed to meet financial reporting deadlines and ultimately reported revenues less than half of what it had projected.

The financial stumble — compounded by the sudden departures of its auditor and board members, including a Prosus executive — scuttled a potential $1 billion fundraising effort, TechCrunch previously reported. In a desperate bid for capital, the startup raised a $200 million investment this year, but at a drastically reduced valuation of about $225-$250 million. This lifeline has since become entangled in legal disputes with some of Byju’s largest backers, including Prosus.

Prosus — whose high-profile bets include Tencent, Delivery Hero, Swiggy and Stack Overflow — has invested about $500 million in Byju’s over the years. It never sold any share in the Indian edtech startup, whose valuation climbed to as high as $22 billion early last year. Prosus said the fair value written down for Byju’s in FY24 was $498 million.

Prosus also reported value drops in other investments. Stack Overflow, bought for $1.8 billion, saw a 39% markdown. The group’s stake worth in Indian online pharmacy PharmEasy decreased by 35%, Prosus reported.

The firm’s readjustment of Byju’s stake follows BlackRock, the world’s largest asset manager, also recently writing off its stake in the Indian edtech startup. Prosus last year complained that the Indian embattled startup had “regularly disregarded advice” from it.

Source link