Technology investor Prosus has marked down the value of its stake in Byju’s further to less than $3 billion. This is a decline of 86% from the valuation of $22 billion when Byju’s last went for a funding round of $250 million in October 2022.
This is the second time in a year that Prosus has marked down Byju’s valuation. In November last year, Prosus had slashed the fair value of Byju’s to $5.97 billion. Prosus holds a stake of around 10% in Byju’s.
Ervin Tu, interim CEO of Prosus, who took over from Bob van Dijk in September commented on Byju’s valuation in an earnings call, after disclosing Prosus’s half-yearly results up to September. “We are not disclosing the exact valuation, but it is sub-$3billion,” Tu said.
“We are in close discussions with the company every day. Byju’s is faced with multiple challenges,” Tu said in response to a question on the troubled edtech firm.
Prosus has listed Byju’s among India portfolio firms that were large under-performers impacting its internal rate of return. Without disclosing specific numbers in its presentation, Prosus said its investment in Byju’s was trading down by 24%.
Investors like Blackrock had cut Byju’s valuation to $8.5 billion as of March 31.
Earlier in July, Prosus’ representative on Byju’s board, Russell Dreisenstock, stepped down from the edtech company, and later cited poor reporting and governance structures as reasons behind the exit.
The series of board exits came at a time when the company had come under fire for a host of issues including delayed financial results, and the resignation of its auditor, Deloitte. Along with Dreisenstock, Chan Zuckerberg Initiative’s Vivian Wu and, and Peak XV Partners GV Ravishankar also stepped down in July.
The mark down of valuation by Prosus follows fresh troubles for Byju’s as the Enforcement Directorate (ED) recently sent a show cause notice to the company and its founder and CEO, Byju Raveendran in an alleged forex violation case.
Byju’s recently overcame a longstanding issue with Davidson Kempner, linked with covenants on its subsidiary Aakash. Earlier in November, Manipal Group chairman Ranjan Pai bought out the debt investment by the US Hedge Fund, in a Rs 1,400-crore deal.
The Board of Control for Cricket in India (BCCI) has also filed a case against Byju’s in the National Company Law Tribunal. The development is understood to be related to the company’s decision not to renew its branding partnerships, on the ground of cost cutting.