Prosus removes $2.1 billion valuation from Byju’s stake after edtech giant’s struggles

India’s largest edtech firm Byju’s has faced significant challenges recently, culminating in one of its major investors completely writing off its stake in the company. Prosus, a technology investment firm holding a 9.6% share in Byju’s, has adjusted the valuation of its holding to zero.

According to Prosus’ latest financial results, the significant decline in value for equity investors in Byju’s necessitated removing any worth from its investment. Prosus Group CIO Erwin Tu acknowledged the issues facing Byju’s but remained hopeful about its future prospects if governance concerns could be addressed.

Byju’s had soared in value to $22 billion at its peak but has struggled over the past two years with financial reporting delays and revenues falling short of targets. Several high-profile departures from its board and audit team exacerbated challenges raising new capital. While securing a $200 million lifeline recently, it represented a major down round to around 1/100th of its earlier valuation.

As one of Byju’s largest shareholders since first investing over $570 million, Prosus had never divested any of its stake even as doubts emerged. However, reflecting a $498 million fair value loss, Prosus was compelled to zero out the holding. It also reduced valuations for other education technology portfolio firms.

While a blow for Byju’s given Prosus’ influence, whether the business can stabilize under new management will prove crucial. The company aims refocusing on products and improving governance, though regaining trust after such setbacks may take time. For investors and users alike, Byju’s journey ahead remains uncertain.