Seven months after firing 1,200 employees, edtech startup Lido Learning has filed for insolvency with the Mumbai bench of National Company Law Tribunal, according to the company’s regulatory filings with the Ministry of Corporate Affairs (MCA).
Lido Learning’s board of directors has passed a special resolution to file an application under section 10 of Insolvency and Bankruptcy (IBC) code 2016, a Livemint report stated.
Lido Learning had raised about $27.3 million from marquee institutional investors such as Alibaba-backed BACE Ventures, Picus Capital, and 9 Unicorns along with leading entrepreneurs like Vijay Shekhar Sharma, Mukesh Bansal, Anupam Mittal and Ananth Narayanan.
“Resolved that pursuant to Section 10 of the Insolvency & Bankruptcy Code, 2016, considering the facts that the company is unable to pay its debts which are due and there are defaults made by the company, the consent of the shareholders be and is hereby accorded to file an application/petition i.e, initiation of Corporate Insolvency Resolution Process by the corporate applicant, be filed before the National Company Law Tribunal, Mumbai Bench so as to resolve its debts,” said the firm’s MCA filings.
In September 2021, the company raised $10 million, led by Ronnie Screwvala’s Unilazer Ventures. The small group, online tuitions company had seen rapid growth and was currently on track to reach a $100 million run rate (revenue) by end of the financial year. Lido Learning offered tuitions in Maths, Science, and English aligned with the CBSE and ICSE for students from KG to Grade 12.
The company had plans for an aggressive expansion in India as well as abroad. Lido Learning’s first-ever TV advertising campaign was supposed to go live during the IPL season, along with the launch of its free user app to give students access to free curriculum-aligned video content for life.
Lido Learning had also announced its entry into the US and Canada with its flagship coding program using the ‘Pair Learning’ methodology, with just two students per teacher to facilitate faster learning, deeper interactions, and real-time problem-solving. Plans were also in place to launch in the UK, Australia, New Zealand and South East Asia in early 2022, in addition to its existing Middle-Eastern, American, and Canadian operations.
As on August 2022, more than 6,000 employees have been shown the door by the edtech companies that include Unacademy (1,150 employees), BYJU’S (550 at Toppr and Whitehat Jr) and Vedantu (724).
The layoffs come as the edtech sector has been hammered by the global macroeconomic conditions and reopening of schools, colleges and physical tuition centres.