Not long back Byju’s was valued at $22 billion, the most valuable education technology startup this side of the world. It looks like nobody is sure anymore.

Prosus, the Netherlands-listed international internet assets arm of South African group Naspers and the largest stakeholder in Byju’s, has slashed the valuation of the education technology company further to $5.1 billion, The Arc reported.

In its annual financial report, Prosus marked down the fair value of its 9.6% stake in Byju’s to $493 million (as of March 2023). The company said Byju’s “lost significant influence during the current year due to the loss of board representation”, which it cited as the reason for writing down its value.

The revised $5.1 billion valuation is 77% below the $22 billion valuation at which the Bengaluru-based company raised funds in October last year. In November, Prosus had pegged the fair value of its stake in Byju’s at $578 million, giving the company a valuation of $5.9 billion.

The news of Prosus’s revised estimates came hours after Bloomberg reported that the company is in “advanced talks” to raise $1 billion in what seems like a desperate last-ditch attempt for survival by its founder and CEO Byju Raveendran.

According to the report, the company is offering perks—which include one-of-a-kind preferential treatment in case the company must liquidate—to win over new backers, a privilege its existing shareholders do not have.

Existing shareholders and creditors have sought to clip Raveendran’s powers as they mull options to sell their stake or merge bits of the company with those of rivals, the report said.

Fundraising issues: This is not the first time this year that news of the company raising funds has made the rounds. There have been multiple reports over the last few months, suggesting the company was in advance talks with investors to raise up to $1 billion. So far, nothing has come of those attempts, except the $250 million debt from US investment firm Davidson Kempner Capital Management. The last equity investment in the company was in October.

“No equity has come so far. These are just random announcements,” an edtech executive told The Morning Context. “And given their current problems, not sure if they will be able to raise further money.”

Byju’s track record on fundraising—read our stories on the phantom fundraises from Sumeru Ventures and Oxshott Capital—also fails to generate confidence in the company.

Byju’s troubles: The edtech firm has been trying to raise fresh funds for months with investor confidence dissipating further after Deloitte resigned as its auditor over significant delays by the company to provide financial information and representatives of three influential backers—Peak XV, Prosus NV and the Chan-Zuckerberg Initiative—quit the Byju’s board without citing their reasons.

The company reported a net loss of Rs 4,588 crore on a revenue of Rs 2,428 crore for the fiscal year ended 31 March 2021, which it filed a year late.

With widening losses and no sign of its FY22 earnings, to say that the optics are bad for Byju’s is a charitable statement. The company stands on a pile of debt including unpaid dues to financiers on the customers’ loans, pending PF and incentive payments to employees, outstanding vendor payments and its biggest monster, a $1.2 billion term loan.

Byju’s has defaulted on interest payment of the $1.2 billion term loan, which it secured in 2021 and the US lender has accused the company of failing to provide its consolidated financials on a quarterly basis. Both parties have sued each other in American courts.

Late on Tuesday, a Delaware court dismissed a request by Byju’s Term Loan B lenders to investigate a $500 million transfer from its US-based subsidiary, Byju's Alpha, to other entities, PTI reported.

The court rejection comes as a sigh of relief for the edtech company which is trying to mollify investors and has denied allegations that it defaulted on lender payments.

But this is not the end of Byju’s troubles, read The Morning Context’s coverage here for a deep dive into the company’s saga.

Also read | Three crises and a lesson for edtech investors