Byju’s Valuation Plummets to Under $3 bn Amid Governance and Financial Woes

Prosus, a tech investor, revealed on Wednesday a stark devaluation of Indian online education giant Byju’s, slashing its valuation to under $3 billion, marking a staggering 86 percent plunge from its peak valuation of $22 billion a year earlier.
Byju's digital learningThe announcement, disclosed by interim CEO Ervin Tu during Prosus’ earnings call, reflects Byju’s grappling with governance challenges and cash-flow issues.

Prosus, one of the large technology investors, owns 25 percent stake in China’s Tencent, now worth $98 billion, Reuters news report said.

Byju’s, in a tumultuous period, witnessed the departure of several executives and board members, which triggered delays in the filing of its financial results for the 2021/22 fiscal year by a significant margin.

The downward revision in Byju’s valuation has been a recurrent theme over the past year. Shareholders, including Prosus and Blackrock, sequentially slashed the valuation from $11 billion in March to $8 billion in May and further down to $5 billion in June.

While Prosus refrained from explicitly citing reasons for the valuation downturn, it previously highlighted Byju’s management’s persistent dismissal of counsel, despite concerted efforts by the Dutch-listed tech firm’s former director to enhance governance standards.

Among Byju’s notable investors are General Atlantic and Silver Lake, both witnessing the company’s tumultuous trajectory.

The education technology giant’s woes escalated with delayed financial disclosures, prompting the departure of auditor Deloitte and three board members in June. Recently, both the chief financial officer and chief technology officer resigned, exacerbating Byju’s ongoing challenges.

Byju’s managed to file incomplete financial results earlier this month, resorting to potential divestiture of business segments to generate liquidity.

Despite logging revenue of Rs 4,530 crore between April and July 2022, Byju’s has remained mum on pending financial updates. Notably, the edtech unicorn reported a substantial loss of Rs 4,588 crore for the fiscal year ending March 31, 2021.

Additionally, the company appears to struggle to meet its projected deadline of achieving group-level profitability by March 2023, indicative of persisting operational hurdles.

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