Ronnie Screwvala-backed Lido Learning has filed for insolvency and bankruptcy, after laying off close to 200 employees in February and defaulting on payments to customers and employees.
Lido Learning’s regulatory filings show that its board has passed a special resolution to file an application under Section 10 of Insolvency and Bankruptcy (IBC) code, 2016.
Filings also noted that Lido Learning has failed to repay its debts to former employees, vendors, customers, lenders and creditors. Further, Anil Drolia has been proposed as the Interim Corporate Resolution Professional.
Entrackr was the first to report this development. Lido Learning was reportedly in talks to get acquired by Reliance Industries.
“Lido Learning’s financial troubles started during the pandemic, when the company’s revenue went down two-folds. The company’s fundraising talks with Chinese investors also did not finalise because of India changing its FDI rules in 2021. Lido Learning was planning to raise about $80 –$90 million in this round,” a source told BusinessLine.
The company has also defaulted on many customer refunds, which resulted in over 50 police complaints against the edtech firm across Delhi, Bengaluru and Haryana. Lido Learning laid off close to 200 employees in February citing lack of funds but these former employees are still waiting for their full and final settlements.
Founded in 2019, Lido Learning offered online classes in Maths, Science, Coding and English, for students from KG to Grade 12. The company had raised $24 million in total funding across multiple funding rounds.
Some investors of Lido Learning include Ronnie Screwvala’s Unilazer Ventures, BAce Capital and Picus Capital among others. In September 2019, Lido Learning founder Sahil Sheth was accused of allegedly stealing 1,180 confidential files from another edtech company Zico Learning. However, Sheth called it a ‘false and fabricated’ case being used for extortion.
This development comes at a time when the global startup ecosystem is going through a funding slowdown which has forced multiple companies to shut shop and layoff employees. Edtech majors like BYJU’S , Unacademy, LEAD, and Vedantu have laid off over 2,000 employees this year which is the highest among all sectors.
Earlier this month, Nandan Nilekani-backed B2B commerce company, ShopX, shut down operations as it could not generate enough cash flow and is in default of multiple loans that it took from its investors. Early stage edtech startups like Udayy, and Crejo.Fun have also shut down operations.