Prosus, the largest non-founder shareholder in Byju’s, has drastically slashed the worth of its stake in the edtech giant, implying a starkly diminished valuation of $5.1 billion to the Indian startup.
Prosus disclosed on Tuesday that it had downsized the value of its 9.6% stake in Byju’s to around $493 million in the financial year ending in March. This figure stands in stark contrast to the $6 billion at which Prosus had valued Byju’s as recently as November of the previous year. More concerningly, that’s a staggering drop from the $22 billion valuation at which Byju’s has raised multiple tranches of funding in the past 18 months.
The markdown comes at a time when the most Indian valuable startup is grappling with a number of challenges — a legal battle with lenders, resignation of board members and departure of global auditing firm Deloitte.
Prosus, Peak XV Partners and Chan Zuckerberg Initiative confirmed late last week that their representatives had resigned from the board of Byju’s. The board members’ resignations came shortly after Deloitte told the startup’s board that it was also resigning from its role.
Deloitte, which was slated to work with Byju’s until 2025, said that the edtech giant had failed to hand over financial results for the year ended March 2022.
In its Tuesday annual report, Prosus said it had lost “significant influence” in Byju’s during the current year “due to the loss of board representation.”
Prosus is not only one of the largest shareholders of Byju’s, it’s also one of the earliest. The investment giant has never sold its stake in the Indian startup, which has raised over $6 billion to date. It’s also not the only Byju’s shareholder to write down the worth of their startup stake.
Byju Raveendran, the co-founder and chief executive of Byju’s, has been working on securing a substantial large funding round to calm his existing investors.
TechCrunch reported last month that Byju’s was in talks with sovereign wealth funds and other investors, aiming to raise up to $950 million.
In a shareholder call last week, the chief financial officer of Byju’s pledged to have the auditing for the financial year ending March 2022 conclude by September this year, and for the financial year ending March 2023 by December, said a person briefed on the minutes of the call.
Raveendran also assured shareholders that he had intended a smoother transition for board members and acknowledged the abrupt departure of Deloitte.
He attempted to assuage the concerns by stating that he was all-in committed to Byju’s, having injected hundreds of millions of dollars of personal funds, taken as loans, into the company.
“Byju’s is not my work; it is my life,” he stated, according to the person briefed.