Prosus writes off $22 billion Indian edtech giant Byju's to zero | TechCrunch

🌈 Abstract

The article discusses Prosus, one of Byju's largest investors, writing off its $2.1 billion stake in the Indian edtech startup Byju's due to a significant decrease in the company's valuation. The article also covers Prosus' concerns about Byju's governance issues and the startup's financial and operational challenges over the past couple of years.

🙋 Q&A

[01] Prosus' Investment in Byju's

1. What is the current status of Prosus' investment in Byju's?

• Prosus, one of Byju's largest investors with a 9.6% stake, has written off its $2.1 billion stake in the Indian edtech startup, stating that the stake is now worth zero "due to the significant decrease in value for equity investors."

2. What is Prosus' outlook on Byju's?

• Despite the write-off, Prosus is still hopeful about Byju's outlook, but improving governance at the Indian firm will be key.

3. What are the challenges Byju's has faced recently?

• Byju's has had a difficult couple of years, grappling with a series of financial and governance setbacks that have tarnished its reputation and imperiled its future.
• The startup's woes were amplified when it failed to meet financial reporting deadlines and ultimately reported revenues well below its own projections.
• The financial stumbles were compounded by the sudden departures of its auditor and board members, including a Prosus executive, and scuttled a potential $1 billion fundraising effort.

4. How has Byju's raised capital recently?

• In a desperate bid for capital, the startup raised $200 million this year, but at a drastically reduced valuation of about $225 million to $250 million.
• This lifeline has also been entangled in legal disputes with some of Byju's largest backers, including Prosus.

[02] Prosus' Other Investments

1. How has Prosus adjusted the value of its other investments?

• Prosus has also cut down the value of its other investments:
  • It reduced the value of its stake in Stack Overflow, which it bought for $1.8 billion in 2021, by 39%.
  • It has lowered the worth of its stake in Indian online pharmacy, PharmEasy, by 35%.

2. What other major investor has written off its stake in Byju's?

• BlackRock, the world's largest asset manager, has also written off its stake in the Indian edtech startup.

3. What has Prosus previously said about Byju's?

• Prosus last year complained that Byju's had "regularly disregarded advice" from it.