Byju's Owned WhiteHat Jr Sued In The U.S. Over Payment Dues

Byju's educational coding arm WhiteHat Jr. has been taken to court by U.S.-based not-for-profit firm Code.org over non-payment of dues.

"This is a civil action for breach of contract arising from WhiteHat’s failure to pay Code.org the agreed-upon charges for its use of Code.org’s platform and licensed content and its ongoing, unauthorised use of that platform and content, in breach of the Tutorial Licensing Agreement," a complaint filed in the San Francisco division of the United States District Court read. NDTV Profit has seen a copy of the complaint.

The development was first reported by TechCrunch.

According to the complaint, WhiteHat Jr. was to pay $4 million across four years in licencing fees to Code.org, starting January 2022. The Karan Bajaj-founded startup took certain limited rights to use Code.org’s platform and lesson content in connection with its online tutoring service targeted at kids.

The complaint notes that WhiteHat made its first four scheduled payments, totalling $1 million, but about a year after the agreement was signed, WhiteHat informed Code.org that it would be unable to make the remaining scheduled licence payments and requested that the original agreement be amended.

At WhiteHat’s request, with an effective date of Jan. 1, 2023, the agreement was amended and WhiteHat agreed to pay the remaining $3 million in installments by December 2025. However, WhiteHat failed to make any more payments despite the amendments and continued to use Code.org’s platform and content.

"WhiteHat has never disputed that it owes the amounts described above to Code.org. The total amount owed by Whitehat under the Agreement is $3 million, exclusive of accrued interest and attorneys’ fees," the complaint said.

Byju's acquired WhiteHat Jr. in 2020 for $300 million, and it was then rebranded as Byju’s Future School.

Apart from this legal complaint, Byju's is facing a $1.2-billion Term Loan B fight with lenders, a National Company Law Tribunal insolvency petition filed by the Board of Control for Cricket in India, and Foreign Exchange Management Act violation allegations on an amount of Rs 9,300 crore, as well as a working capital crunch for which founder Byju Raveendran has reportedly pledged his homes.

NDTV Profit had earlier exclusively reported on Byju's FY22 numbers, in which it posted a consolidated revenue from operations of Rs 5,015 crore in FY22, which missed the company's own guidance of Rs 10,000 crore.

It also posted a near $1-billion loss (Rs 8,245 crore), which rose from Rs 4,564 crore in FY21.