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Prosus further slashes Byju’s valuation to $5.1 billion: Report

Prosus further slashes Byju’s valuation to $5.1 billion: Report

Byju’s was valued at $22 billion in October 2022, when it raised $250 million in a funding round

Tarun Mishra
Tarun Mishra
  • Updated Jun 27, 2023 9:55 PM IST
Prosus further slashes Byju’s valuation to $5.1 billion: ReportProsus further slashes Byju’s valuation to $5.1 billion: Report

Dutch-listed technology investor Prosus, the largest stakeholder in edtech major Byju's, on Tuesday said that it has once again reduced the fair value of its investment in the edtech startup.

In its annual report, released on June 27, Prosus stated that it had lost "significant influence" over Byju's during the year, resulting in a loss of board representation.

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According to Prosus, the current valuation of Byju’s stands at $5.1 billion, adding to the challenges faced by India's most valuable startup.

In September 2022, experts explained that the change in valuation occurred because Prosus started classifying Byju's as a non-controlling financial investment rather than an associate when its shareholding fell below 10 per cent. This led to a different valuation approach.

Byju’s was valued at $22 billion in October 2022, when it raised $250 million in a funding round.

In November 2022, Prosus slashed the fair value of Byju’s to $5.97 billion. Prosus now values its 9.6 per cent stake in Byju's at $493 million in the financial year ended March 31, reported Moneycontrol. This marks a decrease from the previous fair value of $5.97 billion.

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Prosus invested $536 million in Byju's since 2018.

The markdown of Byju's by Prosus was disclosed in the annual report, which comes shortly after Russel Deisenstock, the Dutch investor's representative on Byju's board, resigned.

Two other board members, GV Ravishankar from Peak XV Partners (formerly Sequoia Capital India) and Vivian Wu from the Chan Zuckerberg Initiative, also stepped down due to disagreements with founder Byju Raveendran on operational matters.

Currently, Byju's board consists of only three members, all of whom are founders and members of Raveendran's family.

The edtech company’s statutory auditor Deloitte also resigned last week due to differences over delayed financial statements for FY22. Deloitte was replaced by BDO (MSKA & Associates) as the new statutory auditor of Byju's. Deloitte said it was unable to audit the company because it did not receive financial statements for 2021-22.

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It is also battling a US lawsuit over a $1.2 billion loan, which came weeks after raids over suspected violations of foreign exchange laws.

Earlier this year, Blackrock, too, had cut Byju's valuation to $8.3 billion.

Employee Provident Fund Organisation on Tuesday observed a shortfall in payments from Byju's, Reuters reported. Byju's deposited Rs 123 crore after the EPFO asked it to.

Furthermore, Byju's offices were searched by the Enforcement Directorate (ED) under the Foreign Exchange Management Act, and the company is yet to file audited results for FY22.

Reuters reported on Sunday that Byju’s has told investors it will file 2022 audited earnings by September and 2023 results by December.

In FY21, Byju's reported increased losses exceeding Rs 4,500 crore, despite being a year influenced by the Covid-19 pandemic, which provided growth opportunities for online learning companies.

In May, lenders accused Byju’s of hiding $500 million, while Byju’s filed a counter suit in a New York court challenging the acceleration of the $1.2-billion loan it raised in November 2021.

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Published on: Jun 27, 2023 7:52 PM IST
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