News Update

Prosus Slashes Byju’s Valuation to $5.1 Billion: Report

• ByStartupStory     |    June 28, 2023

Dutch-listed technology investor Prosus has announced another reduction in the fair value of its investment in Indian edtech major Byju’s. According to Prosus’ annual report, released on June 27, the company has lost “significant influence” over Byju’s during the year, leading to a loss of board representation. This development has further compounded the challenges faced by Byju’s, which is India’s most valuable startup.

Prosus currently values Byju’s at $5.1 billion, reflecting a decrease from the previous valuation of $22 billion when the company raised $250 million in a funding round in October 2022. The change in valuation occurred when Prosus classified Byju’s as a non-controlling financial investment instead of an associate after its shareholding fell below 10 percent, resulting in a different valuation approach.

In its financial year ending March 31, Prosus valued its 9.6 percent stake in Byju’s at $493 million, down from the previous fair value of $5.97 billion. Since 2018, Prosus has invested $536 million in Byju’s.

The markdown of Byju’s by Prosus follows the recent resignation of Russel Deisenstock, Prosus’ representative on Byju’s board. Two other board members, GV Ravishankar from Peak XV Partners and Vivian Wu from the Chan Zuckerberg Initiative, also stepped down due to disagreements with Byju’s founder, Byju Raveendran, on operational matters. Currently, Byju’s board comprises only three members, all of whom are founders and members of Raveendran’s family.

Byju’s is facing additional challenges, including a US lawsuit over a $1.2 billion loan and raids by enforcement agencies over suspected violations of foreign exchange laws. The company is also yet to file audited financial statements for FY22 and witnessed a shortfall in payments to the Employee Provident Fund Organisation.

Despite being a year influenced by the Covid-19 pandemic, which presented growth opportunities for online learning companies, Byju’s reported increased losses exceeding Rs 4,500 crore in FY21.

In response to the ongoing issues, Byju’s has assured investors that it will file audited earnings for 2022 by September and 2023 results by December.

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