Byju’s valuation trimmed from $22 bn to under $3 bn, slashed by Prosus Ventures

Byju’s is amidst serious troubles, second time in the year slashed by its tech investor

Byju’s, an Edtech company grappling with financial and governance challenges, has experienced a significant devaluation from tech investor Prosus Ventures. The recent disclosure by Prosus Venture’s interim CEO, Ervin Tu, reveals that the current Byju’s valuation is now below 3 billion, indicating an 86% decrease from its peak valuation of $22 billion. This downward adjustment in valuation follows a series of resignations by executives and board members within Byju’s.

Ervin Tu, the interim group chief executive of Prosus Ventures, along with group chief financial officer Basil Sgourdos, has announced an additional write-down of $315 million on the investment in Byju’s. Prosus Ventures has allocated a total of $536 million in investments to Byju’s since the year 2018.

“We have reported a markdown in Byju’s carrying value. That’s really just driven off the numbers that we’ve received and digested, and assessing those against what we originally thought the business might do. It doesn’t necessarily reflect the long-term view of the business,” said Sgourdos at an earnings call.

In July, a director resigned from Byju’s board, and Prosus Ventures asserted that the directors at Byju’s “regularly disregarded advice” despite repeated attempts by the former director from the Dutch-listed technology firm.

Prosus stated that the decision of its director to step down from Byju’s board was primarily because he was “unable to fulfil his fiduciary duty to serve the long-term interests of the company and its stakeholders.”

Byju’s, once India’s most valuable startup with support from investors like General Atlantic and BlackRock, has witnessed the departure of its auditor, Deloitte, and multiple investor board members in recent months.

Byju’s has faced a series of challenges, including the delay in publishing its financial results, resulting in the resignation of auditor Deloitte and three board members in June. The company’s Chief Financial Officer (CFO) and Chief Technology Officer (CTO) have also resigned in the past week.

Although Byju’s filed delayed and incomplete results earlier this month, it is now exploring the possibility of selling off entire business lines to generate cash. The company is grappling with various issues, including an ongoing legal dispute with lenders concerning a $1.2 billion term loan.

Unable to fulfil the debt repayment, Byju’s laid-off thousands of employees and also shifted the date of the final settlement from September to November.

In a recent development, Manipal Group chairman Ranjan Pai acquired the debt investment from US Hedge Fund David Kempner in a significant ₹1,400-crore transaction earlier this month.

Byju’s has also presented a proposal to its lenders, outlining plans to fully settle its $1.2 billion term loan B within the next six months. The company aims to initiate this process by making an initial payment of $300 million in the next three months.

In an effort to generate the required funds for loan repayment, Byju’s has strategically put up two of its assets, the upskilling platform Great Learning and the book reading platform Epic, for sale. This move is expected to contribute approximately $1 billion to the company’s financial resources.