Prosus writes off its investment in BYJU'S; recognises $493M loss

Prosus, BYJU'S' largest institutional shareholder, has written off its entire investment in the once high-flying edtech startup, which sought new funding at a 99% discounted valuation through a rights issue earlier this year.

“In the current financial year, the group wrote off the fair value of its 9.6% effective interest in BYJU'S, due to the decrease in value for equity investors.  A fair value loss of $493 million was recognised in other comprehensive income in the current year,” Prosus said in its 2024 annual report released on June 24.

BYJU'S did not respond to a query sent by Yourstory.

"We have written down BYJU'S primarily because we have inadequate information on the company’s financial health, liabilities, and future outlook," Prosus said in a statement.

Prosus, a Netherlands-based investment conglomerate owned by South Africa’s Naspers, has invested $578 million in BYJU'S so far, with nearly $400 million coming from its first investment round in 2018. It held an over 10% stake until mid-2022. 

However, it has stopped investing in the edtech firm since 2022, causing its share to drop below 10% and resulting in the loss of "significant influence over the financial and operating policies of the entity," according to its annual report. Prosus, since then, had been regularly writing down its investment in the edtech company.

Last year, Prosus’ board representative for BYJU'S, Russell Dreisenstock also stepped down from his role due to differences with the company’s founder Byju Raveendran, and the management he led. Prosus, unlike most of BYJU'S' other investors such as Peak XV Partners (Sequoia Capital India), and Lightspeed among others, has not sold a single share in the edtech company.

In fact, the Netherlands-based investor has given exits either partial or full to some of BYJU'S early investors, including Peak XV and Lightspeed.

Prosus’ write-off of BYJU'S comes at a time when the investor has sued the edtech company in the Bengaluru bench of the National Company Law Tribunal (NCLT) for oppression and mismanagement for a cramdown rights issue it launched in January at a fraction of its previous valuation. The court has directed BYJU'S to park the money it raised through the rights issue in an escrow account. Prosus did not participate in the rights issue.

Earlier this year, The CapTable reported on the brewing differences between Prosus and BYJU'S and why the company was not inclined to participate in BYJU'S cramdown rights issue.

Prosus, one of the biggest and most aggressive late-stage investment companies in the world, has invested substantially in edtech companies including Skillsoft and Udemy.

Besides BYJU'S, its other bets in India include SoftBank-backed Eruditus, a platform providing upskilling courses globally. Eruditus is the only investment yielding positive returns for Prosus, according to its results presentation.