Tech investor Prosus has significantly reduced the fair value of its 9.6% stake in Byju's to $493 million as of March 31, 2023, valuing the ed-tech startup at only $5 billion. That's around 75% lower than Byju's staggering $22 billion valuation last year.
Naspers-owned Prosus had pegged the value of its stake in Think & Learn Pvt Ltd, the Bengaluru-based ed-tech's parent, at $578 million in September 2022, valuing the company at $6 billion.
The Dutch investor has pumped $536 million into Byju's since 2018. In April 2021, it made an investment amounting to $153 million in India's largest education technology company. "The group lost significant influence in BYJU'S and stopped equity accounting for BJYU'S from September 2022," the Netherlands-based consumer internet giant says in its annual report. "The group continues to account for its interest in BYJU'S as an investment in an associate on account of its significant influence on the board of directors," it adds.
This comes days after Byju's statutory auditor Deloitte Haskins & Sells quit with "immediate effect" citing a long delay in the startup's financial statements for the year ended March 31, 2022. Deloitte, which was appointed as Byju's auditor till 2025, said it has not been able to commence the audit as on date. "As a result, there will be significant impact on our ability to plan, design, perform and complete the audit in accordance with applicable auditing standards," Deloitte said in its resignation letter.
Following the auditor's resignation, Byju's said it has appointed BDO (MSKA & Associates) as its new auditor for the year commencing from FY22 for the next five years. "BDO's extensive experience working with multi-national clientele underscores their expertise in navigating the complexities of consolidation, particularly relevant to Byju's given its multiple global acquisitions in the past three years," the ed-tech giant stated.
BDO will audit Byju's holding company – Think and Learn Pvt Ltd, its material subsidiaries such as Aakash Education Services as well as the overall group consolidated results. "The comprehensive audit coverage will provide a holistic view of Byju's financial performance and ensure transparency across the organization," the company said.
Along with Deloitte, Byju's investor board members from Prosus and Peak XV have resigned. In a statement to Fortune India, Byju's said. "The management has been engaging with investors in constructive discussions on the reconstitution of the board at Byju's, including the induction of independent directors. The need for reconstitution arose as few investors had to vacate the board seat due to their shareholding falling below a minimum required threshold as per our SHA (shareholders' agreement)."
"We want to reassure all stakeholders that we are actively working towards constituting a diverse and world-class board commensurate with the company's size and scale," the ed-tech platform said.
Byju's went on an acquisition spree over the past few years. The ed-tech major shelled out $2.5 billion on acquisitions that included Aakash Educational Services for nearly $1 billion, U.S.-based Epic, kids' coding platform Tynker, professional education firm Great Learning and exam prep platform Toppr. The unicorn plans to launch an initial public offering (IPO) of Aakash Education Services by mid-2024.