Code.org, a US educational non-profit, has filed a lawsuit in a California district court alleging that Byju’s subsidiary WhiteHat Jr breached a licensing contract by not paying fees while continuing to use the Code.org platform.
WhiteHat Jr, which was sold to Byju’s for $300 million in 2020, entered into a partnership with Code.org last year and agreed to pay $4 million over four years to license Code.org’s coding education platform. But in a lawsuit filed earlier this month, Code.org claims that WhiteHat Jr did not honor the payment schedule while continuing to profit from its educational programming software.
According to the legal complaint filed by Code.org, WhiteHat Jr paid the 2022 license fee, but then informed the nonprofit earlier this year that it would not be able to make the remaining scheduled payments under the four-year deal. Code.org alleges that WhiteHat Jr requested an amendment to the original agreement to charge it for its license fee obligations. But Code.org’s lawyers say the original contract makes clear that, even in the event of termination, WhiteHat Jr would not be released from its obligation to pay all future license payments due.
“To date, Whitehat has failed to pay its Q1 2023 invoice or its Q2 2023 invoice. In fact, despite repeated written and verbal requests from Code.org for payment, Whitehat has never paid anything beyond the $1 million which you paid according to the 2022 invoices before the agreement was amended,” Code.org’s lawyers claim.
Byju’s did not respond to a request for comment.
The lawsuit is the latest problem Byju’s faces over its acquisition of WhiteHat Jr, adding to existing problems the company has faced since the purchase. The Indian edtech giant, valued at $22 billion in an early 2022 funding round, earlier this year considered whether to spin off WhiteHat Jr., TechCrunch reported.
It also adds to the woes of Byju’s, which is facing intense pressure due to prolonged delays in filing its financial accounts and governance issues. Prosus, an influential backer of Byju’s, recently lowered the startup’s valuation to less than $3 billion.