Technology investment firm Prosus has written off its investment to zero in edtech firm Byju’s. Due to a "significant decrease in value for equity investors," Prosus wrote off its 9.6 percent stake in the firm, as per various reports.
Due to a "significant decrease in value for equity investors," Prosus wrote off its 9.6 percent stake in the firm.
Technology investment firm Prosus has written off its investment to zero in edtech firm Byju’s. Due to a "significant decrease in value for equity investors," Prosus wrote off its 9.6 percent stake in the firm, as per various reports.
The Dutch listed technology investment firm said, "A fair value loss of $493 million was recognized in other comprehensive income in the current year.” A spokesperson from Prosus said that due to inadequate information on the company’s financial health, liabilities, and future outlook, they wrote down Byju’s.
A group of four investors, including Prosus, GA, Sofina, and Peak XV, have filed an oppression and mismanagement suit against Byju’s. The petition was filed at the Bengaluru bench of the National Company Law Tribunal.
In an extraordinary general meeting, investors, including Prosus, asked for the removal of founder Byju Raveendran as CEO of the company. Over the years, Prosus has lost $500 million on one of its biggest ed-tech bets in India—Byju's—which has subsequently soured.
Prosus said in a statement as per Moneycontrol, “Edtech continues to be a very interesting area for us. At the same time, our businesses have not performed. We spent a lot of time improving their performance. We have three large positions in edtech: stack overflow, Skillsoft, and Byjus. All three of them have not performed. Byjus, we have written down to zero. Byju's has been an important contributor to challenged performance in the last year.”
Recently, HSBC also noted that the nearly 10-percent stake of Prosus in the edtech platform has no value. In a note, HSBC said, "We assign zero value to Byju’s stake amid multiple legal cases and a funding crunch.”
Byjus has been in deep trouble for a while. Along with cases going on with investors, the edtech firm is also cash-strapped. Byju’s has been unable to pay the salaries of its employees. In May this year, the edtech firm paid the April salaries to its employees, except for sales staff.