Prosus writes off $22 billion Indian edtech giant Byju’s

Prosus, a major investor in Byju’s, announced on Monday that its once-$2.1 billion stake in the Indian edtech startup is now valued at zero. Despite this, Prosus remains optimistic about the future of Byju’s, the formerly most valuable Indian startup.

As the largest external investor in Byju’s with a 9.6% stake, Prosus reported in its quarterly update that the value of its stake has diminished to zero due to a significant decrease in equity value. Prosus Group CIO, Erwin Tu, expressed hope for Byju’s future but emphasized the importance of improving governance within the company.

Byju’s has faced challenges in recent years, including financial and governance issues that have impacted its reputation and sustainability. These challenges were exacerbated by missed financial reporting deadlines, lower than projected revenues, and the departure of key board members and auditors, leading to setbacks in fundraising efforts.

Despite these difficulties, Prosus, known for investments in companies like Tencent and Delivery Hero, has invested over $570 million in Byju’s without selling any shares. However, the valuation of Byju’s has decreased significantly, resulting in a fair value loss of $498 million for Prosus in the current financial year.

In addition to Byju’s, Prosus has also devalued its stakes in other investments, including Stack Overflow and PharmEasy. The decision to reassess the value of its investments follows a similar move by BlackRock, who wrote off its stake in Byju’s last year.

Prosus’ adjustment of Byju’s stake signifies ongoing challenges in the edtech sector, highlighting the importance of effective governance and financial management for sustainable growth.