Byju’s was once heralded as the crown jewel of Indian edtech. Today, it is in a severe phase of crashing down. Prosus was one of its largest investors and it had lately announced its stake in the company is worth nothing. His stake once valued at $2.1 billion. The news highlights deepening crisis within the startup.
Prosus holds a 9.6% stake in Byju’s. It revealed status of the stake in its quarterly report. However, it remains cautiously optimistic about the future of the company. It emphasized the need for improved governance to turn the tide.
Byju’s challenges are not new. It has been facing serious financial and governance issues in recent years. The problems started last year when it missed financial reporting deadlines and reported revenues far below its own forecasts. This was further exacerbated by the abrupt departure of its auditor and several board members. All these resulted with loss of potential $1 billion fundraising effort and it was left scrambling for capital.
Byju’s managed to raise $200 million this year. However, this came at a reduced valuation of approximately $225 million to $250 million. The new capital has also been mired in legal disputes with some of its major backers including Prosus.
The disillusionment of Prosus with Byju’s is poignant if its significant investment history is witnessed. It has invested more than $570 million over the years. It never sold any of its shares. Now, it has had to write down its stake and it was a fair value loss of $493 million in the current financial year.
