Code.org sues Byju's subsidiary Whitehat Jr over pending license fees

Code.org, a US-based nonprofit organization, has filed a lawsuit against the online learning platform WhiteHat Jr, a subsidiary of the Indian edtech giant Byju's. 

The lawsuit, filed in a California district court, alleges that WhiteHat Jr breached a licensing contract by failing to make scheduled payments for using Code.org’s coding education platform, TechCrunch reported. 

Details of the agreement and breach

In 2020, Byju's acquired WhiteHat Jr for $300 million. The following year, WhiteHat Jr entered into an agreement with Code.org, committing to pay $4 million over four years for the license. 

However, Code.org claims that WhiteHat Jr has not adhered to the payment schedule. Despite paying the 2022 licensing fee, WhiteHat Jr informed Code.org that it would be unable to make future payments as per the agreement.

Financial struggles and management changes at WhiteHat Jr

The lawsuit adds to the ongoing troubles for Byju's, which has been facing multiple challenges, including disputes with lenders over a $1.2 billion loan and scrutiny from regulators.

WhiteHat Jr has been one of Byju's most loss-making subsidiaries, with Byju's investing over $100 million in it post-acquisition. The company has also seen high-level exits, including the resignation of WhiteHat Jr's CEO Ananya Tripathi.

Code.org’s stance and legal arguments

Code.org's legal complaint emphasizes that the original contract required WhiteHat Jr to fulfil all future licensing payments, amounting to $3 million, even in the event of termination. Despite repeated requests, WhiteHat Jr has allegedly failed to make any payments beyond the initial $1 million for 2022.

Broader impact on Byju’s

The legal challenge is part of a series of issues for Byju’s, which is also grappling with delays in filing financial accounts and governance concerns.

The company, valued at $22 billion in early 2022, has been considering strategies to reduce costs, including potentially winding down WhiteHat Jr. The lawsuit and these challenges reflect the broader difficulties faced by Byju's in managing its acquisitions and sustaining its growth trajectory.

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