Prosus values 9.7% stake in BYJU’s at $578M, cautions on macro-economic challenges

Prosus, the Netherlands-listed investment arm of South African conglomerate Naspers, reported that its stake in BYJU'S had come down to 9.67% on September 30, 2022, from 9.8% as reported on March 31, 2022 due to a one-off adjustment, without specifying details. 

Prosus has invested $536 million in BYJU’S since 2018 and said that the group did not "exert significant influence" over the financial and operating policies of the edtech company. 

“The group recognised a gain on disposal of the associate of $22 million, including a reclassification of the accumulated foreign currency translation losses of $55 million,” said Prosus in its half-yearly results for FY 2023. The results cover the period of April 1, 2022 to September 30, 2022.

The report added, “The fair value of BYJU’S investment, subsequent to the loss of significant influence, is $578 million.”

BYJU's was last valued at $22 billion in March 2022 when it raised a round from Blackrock, Sumeru Ventures, Vitruvian Partners, and Oxshott. The round was led by Founder and CEO Byju Raveendran, with an infusion of $400 million into the company. Further, the commitment of investment from Sumeru Ventures and Oxshott did not materialise for the company.

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Prosus also reported that its payment business in India under PayU reported a Total Payment Value (TPV) of $28 billion for the six-month period of April 2022 to September 2022, contributing 61% of TPV globally. The revenue from the Indian market for PayU grew to $183 million for the period driven by increased digitisation in retail through ecommerce, financial services, and bill payments. The comparable revenue for India for PayU stood at $133 million for the six-month period in FY 2022. 

Prosus also clarified that it did not go ahead with the proposed $4.7 billion acquisition of payment gateway service provider BillDesk as conditions precedent to the acquisition of the company were not fulfilled by September 30, 2022. 

Prosus also reported revenue growth in Swiggy business for the six-month period, reflecting higher average order values and increased revenue from delivery fees and advertising sales. Prosus holds a nearly 33% stake in the food technology business.

The report also called out the change in the macro-environment and its impact on its investment strategy.

“Growth expectations and valuations came under pressure as consumers adapted to new realities of higher inflation and interest rates, plus the effect of these on their daily lives and spending power. We are reducing our cost base sharply to meet these challenges and will take further action to deliver long-term value to our shareholders,” said the report.