Naspers-owned investment firm Prosus has written off its 9.6% stake in troubled edtech Byju's and has recognised a loss of $493 million.
The investment group, in its earnings report, said, “In the current financial year, the group wrote off the fair value of its 9.6% effective interest in Byju's, due to the significant decrease in value for equity investors. A fair value loss of $493 million was recognised in other comprehensive income in the current year.”
Prosus, being one of Byju's largest investors, has so far invested about $500 million. Last year, too, the firm marked down the value of its stake, which took down the edtech's valuation significantly to under $3 billion from its previous high of $22 billion. Other big-time investors, such as Macquarie Capital and BlackRock, too, have marked down the valuation in the recent past of India's once-highly-celebrated edtech poster child.
The Netherlands-based investor, along with three others—General Atlantic, Sofina, and Peak XV—is also fighting an oppression mismanagement case against Byju's. The investor has had concerns about the way the startup has been managed by its current board, which is purely family-led. The group has also demanded the removal of Byju Raveendran from the helm to protect shareholder value.
Byju's is also facing legal challenges with its $200 million rights issue, which is being held at a valuation of only $20–25 million, a 99% dip from its previous valuation of $22 billion. The Bengaluru bench of the National Company Law Tribunal has directed the startup to maintain status quo with regard to existing shareholders and their shareholding and has restrained from using the proceeds of the rights issue.
Earlier, the directors of Prosus had resigned from the company's board. It had cited Byju's regular disregard for advice relating to strategic and operational matters and recommendations on legal and corporate governance.
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