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BUSINESS

Nonprofit Code.org sues Byju’s unit WhiteHat Jr over payment dues

Photo: BYJU
Photo: BYJU

Code.org, an educational nonprofit organization based in the United States, has initiated legal action in a district court in the state of California, alleging that Byju’s subsidiary, WhiteHat Jr., violated a license contract by neglecting to pay fees while concurrently continuing to utilize Code.org’s platform.

Code.org partnered with WhiteHat Jr. in 2021, and WhiteHat Jr. agreed to pay $4 million for four years to license Code.org’s coding education platform. In 2020, WhiteHat Jr. sold itself to Byju’s for $300 million. However, in the complaint submitted earlier this month, Code.org asserts that WhiteHat Jr. did not adhere to the payment schedule while continuing to use its coding courseware.

Code.org filed a lawsuit in court alleging that WhiteHat Jr. paid the licensing fee for 2022 but informed the nonprofit organization earlier this year that it wouldn’t be able to make the following payments under the four-year agreement without incurring additional costs. Lawyers for Code.org claim that the original contract clarifies that WhiteHat Jr. would not be released of its responsibility to pay any future license fees that are still owing, which in this particular instance amounts to three million dollars.

To this day, Whitehat has not paid the invoice for the first quarter of 2023 or the invoice for the second quarter of 2023. “In point of fact, despite Code.org’s repeated written and oral requests for payment, Whitehat has not paid anything at all beyond the one million dollars that it paid in accordance with the 2022 invoices prior to the Agreement being amended,” said attorneys for Code.org, whose funders include Microsoft, Amazon, and Google.

A request for response was made to Byju’s, but they did not answer. The lawsuit is the most recent problem that Byju’s has encountered due to its acquisition of WhiteHat Jr., and it does so in addition to the problems that the firm has been experiencing ever since the acquisition. According to TechCrunch, the Indian educational technology giant considered whether or not to wind down WhiteHat Jr. earlier this year after receiving a $22 billion valuation in a fundraising round at the beginning of 2022.

This further complicates the situation for Byju, which is already under fire for its prolonged delays in completing its financial records and for governance problems. Byju’s significant investor, Prosus, recently wrote down the worth of the business to less than $3 billion. This was done quite recently.

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