Code.org, the US education nonprofit, filed a lawsuit in a California district court alleging that Byju WhiteHat Jr’s subsidiary breached a licensing agreement by failing to pay fees while continuing to use Code.org’s platform.
WhiteHat Jr, which sold to Byju’s for $300 million in 2020, partnered with Code.org in 2021 and agreed to pay $4 million over four years to license its educational coding platform Code.org. However, in the lawsuit filed earlier this month, Code.org alleges that WhiteHat Jr. did not adhere to the payment schedule while continuing to take advantage of the coding course program.
According to Code.org’s legal complaint, WhiteHat Jr paid the 2022 licensing fee, but then informed the nonprofit earlier this year that it would be unable to make the remaining scheduled payments under the four-year agreement. Code.org’s lawyers argue that the original contract makes it clear that, even in the event of termination, WhiteHat Jr will not be released from its obligation to pay all future licensing payments still owed — $3 million in this case.
“To date, Whitehat has not paid either the first quarter 2023 invoice or the second quarter 2023 invoice. In fact, despite Code.org’s repeated written and verbal requests for payment, Whitehat has paid nothing beyond from the $1,000,000 it paid under 2022 tariffs before the Agreement was amended,” wrote lawyers for Code.org, whose donors include Microsoft, Amazon and Google.
Byju’s did not respond to a request for comment.
The lawsuit is the latest trouble for Byju stemming from its takeover of WhiteHat Jr, adding to the company’s existing problems from the market. The Indian edtech giant, valued at $22 billion in a funding round in early 2022, earlier this year weighed whether to spin off WhiteHat Jr, TechCrunch reported.
It also adds to the woes of Byju’s, which has been facing heat for prolonged delays in filing its financial accounts and governance issues. Prosus, a strong backer of Byju’s, recently listed the startup’s valuation below $3 billion.
