Prosus cuts valuation of India’s most valuable startup Byju’s to below $3 billion | TechCrunch

Investment giant Prosus has written down the valuation of education technology giant Byju’s to less than $3 billion, a sharp drop from the $22 billion valuation the Indian startup reached early last year.

Prosus interim CEO Ervin Tu said during an earnings call on Wednesday that Byju’s faces many “challenges” and that Prosus and other backers are working together to help the Bengaluru-based startup recover. Previously, the investment giant announced its financial performance for the six months to September.

Byju’s valuation writedown comes as the Bengaluru-based startup is working on Restructure the business and cut costs The news is the latest major change of fortunes for Byju’s, which has raised more than $5 billion in funding to date, after huge growth during the pandemic caused its losses to surge.

The startup, which also includes Peak XV, Lightspeed India Venture Partners, Sofina, BlackRock, UBS and the Chan Zuckerberg Initiative as backers, disclosed in a belated account, failed to achieve its goals as of March last year. The company is also grappling with more than $1 billion in debt and is under an ongoing investigation by India’s anti-money laundering agency, the Enforcement Directorate. Accused Byju’s of violating national foreign exchange laws amounting to US$1.12 billion.

Byju’s chief financial officer Ajay Goel left the startup late last month to return to Vedanta, following the high-profile and sudden departures of auditor Deloitte and three key Byju board members in June. Publicly slamming the Bengaluru-based startup Despite multiple attempts, it failed to develop sufficiently and ignored investors’ advice and recommendations, leading to its dismissal in July.

For more than a year, Prosus has been actively adjusting the value of its stake in Byju’s, in which it holds more than 9%. Byju’s is valued at $5.1 billion End of March.

Prosus financial results slideshow (Image source: Prosus)

Prosus, one of Europe’s most valuable tech companies, identified Byju’s and Pharmeasy, an online pharmacy startup, launching this year Raised capital at approximately 90% below valuation At its 2021 high, the Amsterdam-listed company was one of the “underperforming large cap companies”.

Prosus’ e-commerce portfolio, which includes fintech, edtech, food delivery and venture deals, had a net asset value of $29 billion at the end of the first half of fiscal 2024, down from $50 billion in the same period. The investment giant said IRR fell to 5% in the first half of fiscal 2024, down from 18% in the same period two years ago.

It’s not all doom and gloom in India for Prosus and its huge investments in the country. The company said on Wednesday that its payments company PayU is now targeting an initial public offering in the second half of 2024 as its business expands efficiently. Prosus also touts Swiggy, a leading food delivery startup with strong growth.

Stay tuned for more content.

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