Prosus Writes Off $2.1 Billion Stake in Byju’s

Overview

• Prosus, a major investor in Byju’s, has recently reported that its stake in the Indian edtech startup is now worth nothing.
• The stake was once valued at $2.1 billion but due to a decrease in value, it has been written off completely.
• Despite this, Prosus remains hopeful about Byju’s future but emphasizes the importance of improving governance.

Background

• Prosus holds a 9.6% stake in Byju’s, making it the largest external investor in the company.
• Byju’s has faced financial and governance challenges in the past few years, leading to a decline in its reputation and financial performance.
• The startup failed to meet revenue projections and reported lower-than-expected revenues, further exacerbating its troubles.

Recent Developments

• Prosus has not sold any shares in Byju’s and has invested over $570 million in the company.
• Byju’s valuation peaked at $22 billion in early 2022 but has since dropped significantly.
• Prosus has also adjusted the value of its investments in other companies such as Stack Overflow and PharmEasy.

Implications

• The decision to write off the stake in Byju’s follows a similar move by BlackRock, another major investor in the company.
• Prosus has expressed concerns about Byju’s lack of adherence to advice provided by investors.