Prosus Writes Off Its Entire $500 Mn Stake In BYJU’S To Zero

Netherlands-based Prosus, which is one of the biggest stakeholders in BYJU’S, has now written off its entire investment in the Bengaluru-based edtech startup. In a recent document, Prosus holds almost 10% (9.6%) in the edtech startup. 

“We impaired BYJU’S down to zero at the end of FY24. The fair value written down was $493 Mn for FY24. We have written down BYJU’S primarily because we have inadequate information on the company’s financial health, liabilities and future outlook,” Prosus shared in a press statement with Inc42.

To add some context, Prosus has invested around $536 Mn in BYJU’S since 2018. At BYJU’S peak valuation – $22 Bn, Prosus 9.6% stake would be worth roughly around $2.2 Bn. 

The fresh development comes close on the heels of financial firm HSBC casting serious doubt on the future of BYJU’S, assigning zero value to Prosus’ nearly 10% stake in the company.

“We assign zero value to BYJU’S stake amid multiple legal cases and funding crunch,” HSBC said in a note on May 21.

The development comes soon after BYJU’S raised a $200 Mn rights issue at a valuation of $225 Mn. This is a 99% discount to its peak valuation of $22 Bn.

Recently, US-based asset management company Baron Capital Group reduced the fair value of its investment in the edtech firm by 99.85% to $120 Mn as of March 31, 2024.

Last week, the edtech giant moved to Karnataka High Court challenging the order of the National Company Law Tribunal (NCLT) restraining it from going ahead with the second tranche of its $200 Mn rights issue.

On June 13, Inc42 reported that the NCLT directed BYJU’S to maintain the current status of existing shareholders and their shareholdings. 

BYJU’S has been grappling with fires on multiple fronts, including a looming debt crisis, impending mass layoffs, delayed salaries, a cash crunch and a bevy of legal and insolvency cases filed by its investors and vendors.