Prosus downgrades edtech giant BYJU's valuation to less than $3bn
Tech investor Prosus has reduced the value of its investment in Indian edtech giant BYJU'S, leading to a company valuation of under $3 billion. This is a massive 86% drop from the earlier funding round valuation of $22 billion. Interestingly, this is the second time within a year that Prosus has lowered BYJU'S valuation, with the company last officially valued at over $22 billion in October 2022. It raised $250 million at that time.
Prosus held a 9% stake in BYJU'S
For over a year, Prosus has been adjusting the worth of its holding in BYJU'S, in which it owns over 9% stake. To recall, it valued BYJU'S at $5.1 billion at the end of March. The net asset value of Prosus's e-commerce portfolio, featuring fintech, edtech, venture deals, and food delivery stood at $29 billion at the end of the first half of FY 2024. This is down from $50 billion during the same period in 2021.
Governance issues and board exits plague BYJU'S
BYJU'S valuation downgrade comes after a series of governance issues and board member departures. In July, Prosus' representative on BYJU'S board, Russell Dreisenstock, stepped down, citing poor reporting and governance structures as his reasons for leaving. Alongside Dreisenstock, Chan Zuckerberg Initiative's Vivian Wu and Peak XV Partners (Sequoia Capital India)'s GV Ravishankar also resigned in July. The company has faced delayed financial results as well as the resignation of its auditor, Deloitte.
BYJU'S addresses financial challenges and asset sales
In light of these challenges, BYJU'S has given a proposal to its lenders, expressing intent to repay its $1.2 billion term loan B within the next six months. The company will achieve this by making an initial payment of $300 million within the next three months. To secure the funds for loan repayment, BYJU'S is conducting a review of its key assets and putting Great Learning and Epic up for sale. This could generate about $1 billion.
