Prosus Writes Off $530 Million Byju's Stake But Reiterates Confidence in Edtech

Dutch investment behemoth Prosus has officially written down its entire $530 million stake in Indian edtech company Byju's, citing a sharp drop in the firm's valuation. The move comes as a big setback for what was perhaps once India's most iconic startup in the education technology sector.

Byju's, at one time worth more than $22 billion, has experienced a sharp decline in the last year on the backdrop of governance troubles, delayed disclosure of financial results, jobs cuts, and growing investor scrutiny. Prosus had already flagged previously Byju's opacity and operational issues.

Even with the enormous loss, Prosus is optimistic regarding the wider education technology sector, asserting that its edtech portfolio is diversified and continues to provide promising returns.

Strong Performance in Other Investments

While Byju's disappointed, other Prosus-backed businesses have improved the company's overall performance. Food delivery app Swiggy registered a 24% revenue growth in local currency. PayU, the fintech payments business, had a 22% higher consolidated revenue at $1.1 billion in FY24. Other platforms like Meesho and ElasticRun also reported strong performances, backing up Prosus's investment thesis across emerging markets.

Edtech Faces Global Headwinds

Byju's is not the only edtech letdown in Prosus's portfolio. The company also witnessed negative returns from Skillsoft and Stack Overflow, signaling broader volatility in the world of global edtech. Post-pandemic normalization, heightened competition, and profitability issues have served to dent investor confidence in the space.

Edtech Still a Bet Worth Making

In spite of disappointments, Prosus has a positive outlook. The company reaffirmed its confidence in the long-term promise of edtech, particularly in disadvantaged markets. "While some bets haven't paid off, we remain confident in the transformative power of technology in education," said a company statement.

With meaningful capital still invested across international edtech companies, Prosus's future actions will be under close observation as a gauge for investor confidence in the sector.