Byju’s, Pharmeasy among biggest underperformers in Prosus' India portfolio in H1

Overall, the technology investor earned an average IRR of 5 percent in H1 FY24, down from 18 percent in H1 of FY22.

Edtech firm Byju’s and health-tech company Pharmaeasy are among the biggest underperformers in Prosus’s India portfolio, as indicated in the technology investor’s financial report, highlighting a time when both companies have faced significant challenges in the past year.

According to the firm’s half-yearly financials, while Byju’s recorded a negative internal rate of return (IRR) of 24 percent, Pharmaeasy gave Prosus 41 percent negative returns in H1 FY24.

This comes at a time when the investor has slashed Byju's’ valuation down to less than $3 billion following a series of troubles for the company on multiple fronts with liquidity crisis, repayment to stakeholders and a series of top-level exits.

“We have reported a mark down in Byju's current value. We have written it (Byju's) by a further $315 million. We do that from time to time. It does not reflect our long term view of the business. It reflects current trading circumstances,” a senior Prosus executive said on post-earnings call with the media.

In June, Moneycontrol reported that Prosus has pegged the fair value of its 9.6 percent stake in Byju's at $493 million, effectively valuing the company at $5.1 billion. Byju's was last officially valued at over $22 billion in October 2022, when it raised a $250 million funding round. In November last year, Prosus first slashed the fair value of Byju's to $5.97 billion.

“Byju's is more challenged and the company is facing multiple headwinds. We and other shareholders are working everyday to improve the situation. We are in close discussions with the company every day,” the executive added.

Earlier in July, Prosus’ representative on Byju’s board, Russell Dreisenstock, stepped down from the edtech company, later citing poor reporting and governance structures as reasons behind the exit.

Prosus on Pharmaeasy

Prosus has also marked down the valuation of Pharmaeasy at a time when it is in hot waters due to lender commitments, delayed IPO and pending funding round. The company’s investors have also slashed its 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 percent, according to media reports.

“Another 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,” said the Prosus spokesperson.

The technology investor’s representative further said that it currently owns 13 percent of Pharmeasy and has not disclosed the full value of the company.

Meanwhile, Prosus also earned profitable returns from other Indian firms in its portfolio including Swiggy, Eruditus, PayU India, Meesho and Elastic Run. Prosus reported a profitable IRR of 7 percent from Swiggy, and 22 percent from Eruditus. It also earned 30 percent positive returns from PayU India, 32 percent from Meesho , and 31 percent from Elastic Run in H1FY24.

Overall, the technology investor earned an average IRR of 5 percent in H1 FY24 over down from 18 percent in H1 of FY22.