Prosus writes off Byju's stake, cites growth in PayU and Swiggy

Consumer internet and technology investor Prosus has written off its 9.6% stake in edtech platform Byju's citing a decrease in value for equity investors. The company reported a value loss of $ 493 million in the reporting year that ended on March 31, 2024.

The Prosus group has built businesses in the online classifieds, food delivery, payments and fintech, and education technology sectors. Through the Prosus Ventures team, the group invests in new technology growth opportunities within logistics, fintech, health, blockchain, social and e-commerce platforms, and agriculture.

Some popular Indian brands in which Prosus has invested in, or has acquired or built include BYJU'S, DeHaat, Good Glamm Group, Meesho, PayU India, Pharmeasy, and Swiggy among others.

Food delivery became a focus area for this Dutch-listed Naspers' subsidiary. The group’s recent report showed that the food-delivery market is expected to grow revenue from US$ 122 billion in 2023 to US$ 171 billion in 2027.

The ten-year-old Swiggy saw a growth of 26% year-over-year in its Gross Order Value, revealed the 2024 annual report of Prosus released today. By the end of December 2023, its user base touched the milestone of 104 million, with a fleet of around 387,000 active delivery partners.

Prosus holds a 32.65% stake in Bengaluru-based Swiggy. Swiggy’s revenue grew by 24%, excluding mergers and acquisitions and adjusted EBITDA improved to a loss of US$ 261 million.

“Swiggy’s core food-delivery business grew by double digits on healthy order growth and higher average order value,” highlighted the report.

Revenue streams such as restaurant advertising were added and nominal platform fee was introduced that improved operational profitability.

The quick commerce business saw growth better than overall e-commerce industry growth due to its deeper geographical penetration (with 487 active dark stores across 26 cities) and greater stock-keeping unit (SKU) expansion (with over 9,500 unique items being listed on the platform).

The report indicated an improvement in the delivery business’ unit economics because of its larger basket sizes, expanded user base, and improved operational efficiency.

Swiggy has filed a confidential pre-draft red herring prospectus with the Securities and Exchange Board, and the stock exchanges on 26 April 2024 for a $1.25 billion initial public offering. Due to its ongoing IPO process, the group did not disclose the company’s internal rate of return (IRR).

Aside from mentioning its progress in the food delivery segment in India, the group highlighted that India remains a strategic market for its associate business, PayU. “The country recorded an increase of 44% YoY in the total number of retail digital transactions in FY24, while payment volume increased 20%,” said the report.

The report pointed to strong growth within the core Payments Service Provider (PSP) business and improved overall profitability for PayU India. “Consolidated revenue grew 38% to US$1.1bn, driven by growth in core PSP operations in India,” showed the company’s performance portfolio.