Technology investor Prosus has revised down the worth of its stake in Byju’s to less than $3 billion. This marks an 86% decline from the valuation of $22 billion during Byju’s last funding round of $250 million in October 2022. This is the second instance within a year where Prosus has slashed the valuation of Byju’s; the fair value was adjusted to $5.97 billion in November last year. Prosus currently holds a roughly 10% stake in Byju’s.
Ervin Tu, the interim CEO of Prosus, addressed Byju’s valuation during an earnings call, stating, “We are not disclosing the exact valuation, but it is sub-$3 billion.” Tu acknowledged the challenges faced by Byju’s and mentioned ongoing discussions with the company.
Byju’s has been embroiled in various issues, including delayed financial results, auditor resignations, and high-profile board exits. Prosus listed Byju’s as a large under-performer among its India portfolio firms, impacting its internal rate of return. The recent devaluation by Prosus aligns with a broader trend, as investors like BlackRock had already cut Byju’s valuation to $8.5 billion as of March 31.
Board exits, including that of Prosus’ representative Russell Dreisenstock, have occurred amid concerns over reporting and governance structures. Byju’s also faces legal challenges, with the Enforcement Directorate issuing a show cause notice in an alleged forex violation case. Additionally, the Board of Control for Cricket in India (BCCI) has filed a case against Byju’s in the National Company Law Tribunal, reportedly linked to the non-renewal of branding partnerships for cost-cutting reasons. Despite these challenges, Byju’s recently resolved an issue with Davidson Kempner regarding covenants on its subsidiary Aakash, with Manipal Group chairman Ranjan Pai acquiring the debt investment in a Rs 1,400-crore deal.
