Code.org, the non-profit organization dedicated to education in the United States, has initiated legal action in a California district court, asserting that WhiteHat Jr, a subsidiary of Byju’s, violated a licensing agreement by neglecting to remit fees while persisting in utilizing Code.org’s platform.
WhiteHat Jr, acquired by Byju’s for $300 million in 2020, had entered into a partnership with Code.org in 2021, committing to a $4 million payment over a four-year period for the licensing of Code.org’s coding education platform. However, according to the lawsuit filed in the past month, Code.org contends that WhiteHat Jr did not adhere to the payment schedule while continuing to utilize its coding curriculum.
Code.org’s legal complaint states that WhiteHat Jr paid its 2022 licensing fee but subsequently informed the non-profit earlier this year that it would be unable to fulfill the remaining scheduled payments under the four-year agreement. Code.org’s legal team argues that the original contract explicitly stipulates that, even in the case of termination, WhiteHat Jr remains obligated to fulfill all outstanding future licensing payments, amounting to $3 million in this instance.
The legal document highlights, “To this day, Whitehat has failed to pay either the Q1 2023 invoice or the Q2 2023 invoice. In fact, despite repeated written and oral requests by Code.org for payment, Whitehat has not paid anything at all beyond the $1,000,000 that it paid pursuant to the 2022 invoices before the Agreement was amended.” Code.org counts Microsoft, Amazon, and Google among its donors.
As of now, Byju’s has not responded to requests for comment on the matter.
This legal dispute represents the latest challenge for Byju’s arising from its acquisition of WhiteHat Jr, compounding existing issues faced by the company since the acquisition. Byju’s, an Indian edtech giant valued at $22 billion in a financing round in early 2022, had reportedly contemplated winding down WhiteHat Jr earlier this year, as reported by TechCrunch.
The lawsuit adds to Byju’s challenges, as the company is under scrutiny for prolonged delays in filing financial accounts and governance concerns. Prosus, a significant supporter of Byju’s, recently devalued the startup to below $3 billion. The legal action reflects the complexity of the issues surrounding Byju’s-owned Indian startup WhiteHat Jr, amplifying the broader challenges faced by the education technology company.
