Code.org, the U.S. educational nonprofit, has filed a lawsuit in a California district court alleging that Byju’s subsidiary WhiteHat Jr breached a licensing contract 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 Code.org’s coding education platform. But in the lawsuit filed earlier this month, Code.org claims WhiteHat Jr did not honor the payment schedule while continuing to leverage its coding courseware.
According to Code.org’s legal complaint, WhiteHat Jr paid its 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 deal. Code.org’s lawyers argue the original contract makes clear that, even in the event of termination, WhiteHat Jr would not be relieved of its obligation to pay all future licensing payments still owed — $3 million in this case.
“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,” wrote lawyers of Code.org, whose donors include Microsoft, Amazon and Google.
Byju’s did not respond to a request for comment.
The lawsuit is the most recent trouble for Byju’s stemming from its acquisition of WhiteHat Jr, adding to existing issues the company has faced since the purchase. The Indian edtech giant, valued at $22 billion in a financing round in early 2022, earlier this year weighed whether to wind down WhiteHat Jr, TechCrunch reported.
It also adds to the woes of Byju’s, which is facing heat for protracted delays in filing its financial accounts and governance issues. Prosus, an influential backer of Byju’s, recently wrote down the valuation of the startup to below $3 billion.