Prosus slashes Byju's valuation to under $3 billion amid governance, cash-flow woes

Tech investor Prosus NV on Wednesday said that it is valuing education firm Byju's at under $3 billion. This represents a staggering 86 per cent decline from Byju's peak valuation of $22 billion just last year. The disclosure, made during the Prosus earnings call by interim CEO Ervin Tu, comes as Byju's grapples with governance challenges and cash-flow issues.

This latest markdown adds to a series of downward adjustments in Byju's valuation, marking a tumultuous period for the education technology company. Several executives and board members have resigned in recent times, contributing to a delay in filing its 2021-22 financial results by a year.

Over the past year, major shareholders, including Prosus and BlackRock, have successively reduced Byju's valuation from $22 billion to $11 billion in March, $8 billion in May, and $5 billion in June. The latest cut to under $3 billion further underscores the challenges the company is facing.

Prosus did not provide a specific reason for the recent valuation cut in its announcement. However, in July, the tech investor pointed out that Byju's management had "regularly disregarded advice," despite efforts by the Dutch-listed firm's former director to enhance governance.

Byju's, backed by investors such as General Atlantic and Silver Lake, has encountered turmoil in recent months. Delays in publishing financial results led to the resignation of auditor Deloitte and three board members in June. In the past week, the company also witnessed the departure of its chief financial officer and chief technology officer.

Earlier this month, Byju's filed incomplete financial results, as it explores options to raise capital, including the potential sale of entire business lines. The combination of governance issues, executive exits, and financial uncertainties has created a challenging environment for Byju's, once regarded as one of the most promising players in the Indian edtech sector.

Investors and industry observers are closely monitoring Byju's strategic moves as it navigates these challenges and seeks to regain stability in a highly competitive and dynamic education technology landscape.

(With Reuters inputs)