The 9.6% stake that investment firm Prosus held in the edtech startup Byju’s has been written off. The investment firm owned by Naspers claims that the write-off was caused by a decline in the value of Byju’s stock for equity investors. Given that the majority of Byju’s investors now see the edtech company as having almost no value, this is a grave understatement.
“A fair value loss of $493 million was recognised in other comprehensive income in the current year,” said Prosus in a stock exchange filing in the Netherlands.
For context, Prosus has made several investments totaling approximately $500 million in Byju’s. Meesho, Eruditus, and Swiggy are a few other well-known Indian startups in its portfolio.
In recent years, Byju’s has experienced a decrease in valuation from its initial investors, including Prosus. Prosus’s nearly 10% ownership in Byju’s has no value, according to a recent statement from financial firm HSBC.
The event transpired shortly after Byju’s, valued at $225 million, raised $200 million in a rights issue. Its peak valuation of $22 billion is now at a 99% discount.
According to the most recent Forbes Billionaire Index 2024, founder Byju Raveendran’s net worth has also dropped to zero as a result of the company’s precipitous decline in valuation. His previous net worth was around $2.1 billion, or Rs 17,545 crore.
In the last 12 months, Byju’s has experienced a board and top-level exodus connected to its financial problems. Ajay Goel, the company’s chief financial officer, departed in October 2023, while Arjun Mohoan, the CEO for India, submitted his resignation in April of this year. Rajnish Kumar and T V Mohandas Pai, who joined the advisory council of edtech startup Byju in July of last year, also declared their resignations from the company last month.
As the company divided its operations into three main divisions—The Learning App, Online Classes and Tuition Centers, and Test-prep—Raveendran is currently in charge of Byju’s daily operations.
Prosus has written off its investment in other companies before Byju’s. The Dutch investment firm reduced its $38 million investment in ZestMoney, a buy-now, pay-later startup, last year. Later, in a fire sale, DMI Group purchased the Mumbai-based business.
The announcement of Byju’s markdown is one of several similar, unimpressive ones regarding the once-popular edtech company. Barring a miracle, the near future is completely hopeless with major legal and regulatory issues still looming over the firm’s and its founder’s conduct. That would be known by Byju Raveendran, who is also most likely in prayer.
