Prosus terms Byju’s and Pharmaeasy as ‘large underperformers’

From 2018 onwards, Prosus has invested $536 million in Byju's. It revalued the investment to $493 million in June, an eight per cent decrease. In addition to Prosus, Byju's early sponsor Blackrock has reduced its interest in the company. Prosus had first slashed the fair value of Byju's to $5.97 billion November last year

Investment firm Prosus has identified edtech firm Byju’s and health-tech company Pharmaeasy among the “large underperformers” in its first half of FY24 India portfolio.

According to the company's half-yearly financials report, while Byju's had a negative internal rate of return (IRR) of 24 per cent, Pharmaeasy had a negative IRR of 41 per cent in H1 FY24, reports Moneycontol.

Prosus has also marked down the value of its stake in Byju’s to less than $3 billion, representing a decline of more than 86 per cent from the previous funding round valuation of $22 billion.

From 2018 onwards, Prosus has invested $536 million in Byju's. It revalued the investment to $493 million in June, an eight per cent decrease. In addition to Prosus, Byju's early sponsor Blackrock has reduced its interest in the company. Prosus had first slashed the fair value of Byju's to $5.97 billion November last year. "Byju's is more challenged and the company is facing multiple headwinds. We and other shareholders are working every day to improve the situation. We are in close discussions with the company," a senior Prosus executive said.

While debt investors sued the edtech firm after it missed payment deadlines, Peak XV (formerly Sequoia), Prosus and Chan Zuckerberg resigned from Byju's board after the company failed to submit its audited financial records for FY22 and FY23.

Prosus has also slashed Pharmeasy's valuation down to half from $5.6 billion, while the company is attempting to raise a new round at a lower valuation of up to 90 per cent, the report mentioned. "Another reason is a write down in Pharmeasy of about $118 million and that's really driven by the need for Pharmeasy to raise money to settle debt. We actually participated in that round which expresses our confidence in the business going forward," a Prosus spokesperson was quoted as saying.

Meanwhile, Prosus gained profits from other Indian companies in its portfolio, such as Swiggy, Eruditus, PayU India, Meesho, and Elastic Run.

Swiggy generated a 7 per cent IRR for Prosus, while Eruditus generated a 22 per cent IRR. In the first of FY24, it also achieved 30 per cent positive returns from PayU India, 32 per cent from Meesho, and 31 per cent from Elastic Run.