Investment firm Prosus has made a significant move, writing off the entire value of its 9.6% stake in the Indian edtech giant, Byju’s. The reason behind this drastic decision? A decrease in value for equity investors in Byju’s, which has led most financial backers to attribute close to zero value to the once-promising edtech firm.
The Financial Plunge
Prosus, known for its investments in Indian startups like Swiggy, Meesho, and Eruditus, had poured approximately $500 million into Byju’s over the years. However, the company’s valuation has been on a downward spiral. Even financial firm HSBC recently declared that Prosus’ nearly 10% stake in Byju’s holds zero value.
Byju’s, which once boasted a peak valuation of $22 billion, recently raised a mere $200 million in a rights issue at a valuation of $225 million—a staggering 99% discount from its heyday. This sharp decline has also impacted founder Byju Raveendran’s net worth, which plummeted to zero, according to the Forbes Billionaire Index 2024. Not long ago, his net worth stood at Rs 17,545 crore (approximately $2.1 billion).
Leadership Turmoil
The financial woes have also triggered an exodus at the top levels of Byju’s. Chief Financial Officer Ajay Goel left in October 2023, followed by Arjun Mohoan, the chief executive for India, who resigned in April this year. Last month, Rajnish Kumar and T V Mohandas Pai, both part of Byju’s advisory council, also bid farewell to the company.
Currently, founder Byju Raveendran is overseeing the day-to-day operations as the company consolidates its businesses into three key divisions: The Learning App, Online Classes and Tuition Centres, and Test-prep.
Prosus’ History of Write-offs
This isn’t the first time Prosus has written off an investment. Last year, the Dutch investment firm marked down its $38 million investment in buy-now-pay-later startup ZestMoney, which was later acquired by DMI Group in a fire sale.
The Bleak Outlook
With legal and regulatory issues still looming over Byju’s, the future appears grim. Byju Raveendran, once a billionaire, now faces uncertainty. Perhaps he’s praying for a miracle, but the odds seem stacked against the once-fancied edtech firm.
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