In a recent legal development, Code.org, the prominent U.S. educational nonprofit, has initiated a lawsuit in a California district court, accusing Byju’s subsidiary WhiteHat Jr of violating a licensing contract by neglecting to pay fees while continuing to utilize Code.org’s educational platform.
The background of the dispute dates back to 2021 when WhiteHat Jr, acquired by Byju’s for $300 million in 2020, entered into a partnership with Code.org. The agreement stipulated that WhiteHat Jr would pay $4 million over four years to license Code.org’s coding education platform. However, according to the lawsuit filed earlier this month, Code.org contends that WhiteHat Jr did not adhere to the payment schedule while still benefiting from its coding courseware.
The legal complaint from Code.org alleges that although WhiteHat Jr fulfilled its 2022 licensing fee, the company subsequently informed the nonprofit that it would be unable to meet the remaining scheduled payments outlined in the four-year deal. Code.org’s legal team argues that, based on the original contract, even in the event of termination, WhiteHat Jr remains obligated to settle all future licensing payments still owed — in this case, an outstanding $3 million.
The court documents state, “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, known for its coding education initiatives, boasts support from influential donors such as Microsoft, Amazon, and Google.
Byju’s, the parent company of WhiteHat Jr, has not issued a public response to the lawsuit as of now.
This legal dispute adds to the challenges Byju’s has faced since acquiring WhiteHat Jr. The Indian edtech giant, valued at $22 billion in early 2022, reportedly considered winding down WhiteHat Jr earlier this year, according to TechCrunch. The acquisition has proven to be a source of ongoing issues for Byju’s.
Beyond the legal matters, Byju’s is also grappling with delays in filing financial accounts, contributing to governance concerns. Prosus, a key backer of Byju’s, recently marked down the startup’s valuation to below $3 billion, underscoring the broader challenges faced by the education technology behemoth.
As the lawsuit unfolds, it sheds light on the intricate dynamics within the edtech industry and underscores the importance of transparent and mutually beneficial partnerships in navigating the evolving landscape of digital education. The outcome of this legal battle will undoubtedly be closely watched by stakeholders across the education and technology sectors.