U.S. educational nonprofit Code.org has initiated legal action against WhiteHat Jr, a subsidiary of Byju’s, alleging a violation of a licensing agreement. The lawsuit, filed in a California district court, claims that WhiteHat Jr failed to adhere to the payment schedule outlined in the agreement while continuing to use Code.org’s coding education platform.
The partnership between WhiteHat Jr and Code.org was established in 2021, with an agreement for WhiteHat Jr to pay $4 million over four years for the licensing of Code.org’s coding education platform. Despite making the 2022 licensing fee payment, WhiteHat Jr informed Code.org that it couldn’t fulfill the remaining scheduled payments for the four-year deal. Code.org asserts that the original contract specifies that even in the event of termination, WhiteHat Jr remains obligated to pay all future licensing payments, amounting to $3 million in this case.
Code.org’s legal complaint outlines that WhiteHat Jr has not paid the Q1 2023 and Q2 2023 invoices, despite repeated requests for payment. The lawsuit highlights WhiteHat Jr’s failure to pay beyond the $1 million that was paid pursuant to the 2022 invoices before the agreement was amended. Code.org’s donors include major tech companies like Microsoft, Amazon, and Google.
WhiteHat Jr was acquired by Byju’s for $300 million in 2020 and partnered with Code.org in 2021. This legal dispute adds to Byju’s challenges following its acquisition of WhiteHat Jr. The Indian edtech giant, valued at $22 billion in a 2022 financing round, faced considerations earlier this year about potentially winding down WhiteHat Jr. Byju’s is also grappling with delays in filing financial accounts and governance issues, leading to a write-down of its valuation by influential backer Prosus to below $3 billion. Byju’s has not provided a comment on the legal proceedings.
This lawsuit further underscores the complexities and challenges that can arise in the rapidly evolving and competitive edtech industry. With the increasing prominence of online education platforms and partnerships, contractual disputes and financial considerations become critical aspects of the business landscape. The outcome of this legal action will likely have implications for the relationship between educational nonprofits and edtech companies, potentially influencing how partnerships and licensing agreements are structured and enforced in the future.
