Code.org, the US educational nonprofit, filed a lawsuit in a California district court alleging that Byju's subsidiary, WhiteHat Jr, breached a licensing agreement by failing to pay fees while continuing to use the Code.org platform.
WhiteHat Jr, which sold to Byju's for $300 million in 2020, partnered with Code.org last year and agreed to pay $4 million over four years to license Code.org's coding education platform. But in the lawsuit filed earlier this month, Code.org claims that WhiteHat Jr failed to meet its payment schedule while continuing to leverage its educational coding software.
According to Code.org's legal complaint, WhiteHat Jr paid its 2022 license fee, but then informed the nonprofit earlier this year that it would not be able to make the remaining payments scheduled under the four-year agreement. Code.org alleges that WhiteHat Jr requested that the original agreement be modified to delay its outstanding license payment obligations. But Code.org's lawyers argue that the original contract makes clear that, even in the event of termination, WhiteHat Jr would not be relieved of its obligation to pay all future license payments still due.
“As of today, Whitehat has not paid either the invoice for the first quarter of 2023 or the invoice for the second quarter of 2023. In fact, despite repeated written and oral requests for payment by Code.org, Whitehat has not paid anything beyond the $1 million it paid under the 2022 invoices before the Agreement was modified,” Code.org lawyers allege.
Byju's did not respond to a request for comment.
The lawsuit is the latest issue for Byju's stemming from the WhiteHat Jr acquisition, adding to existing problems the company has faced since the purchase. The Indian edtech giant, valued at $22 billion in a funding round in early 2022, earlier this year weighed shutting down WhiteHat Jr, TechCrunch reported.
It also adds to the woes of Byju's, which is facing steep delays in filing its financial accounts and governance issues. Prosus, an influential backer of Byju's, recently reduced the startup's valuation to less than $3 billion.
