Cash-strapped edtech gamer Lido Learning files for bankruptcy

Months after ceasing operations and asking all of its employees to quit, edtech gamer Lido Learning, which was in talks to be acquired by Reliance Industries, has filed for insolvency and bankruptcy with the Mumbai bench of the National Company Law Tribunal (NCLT), according to company regulatory filings with the Department of Corporate Affairs (MCA).

“Resolved that under Section 10 of the Insolvency and Bankruptcy Code, 2016, in view of the company being unable to pay its debts due and there being defaults in payment by the part of the company, the consent of the shareholders be and is hereby granted to file an application/petition, i.e. the initiation of the process of resolution of corporate insolvency by the applicant company, be filed in the National Company Law Tribunal, Mumbai Bench to resolve its debts,” the documents read.

This development comes days after the Lido Learning Board of Directors passed a resolution to file an application under Article 10 of the Insolvency and Bankruptcy Code, which is the first step to start the process. insolvency resolution.

While Lido Learning had grown since its inception in 2019 by Sahil Sheth, it failed at a time when the edtech sector in India has grown by leaps and bounds, i.e. over the past couple of years .

While other Indian edtech players such as Byju hit a pandemic-induced peak and benefited from the unprecedented shift to e-learning, Lido Learning faced financial challenges and saw a decline in its income. The situation deteriorated after its talks with Chinese investors to raise millions in a funding round last year were unsuccessful due to changes to India’s FDI rules.

And although he has raised a good amount of funds – including a $10 million round in September 2021 – he also defaulted on numerous customer refunds, resulting in more than 50 police complaints against the edtech company in Delhi, Bengaluru and Haryana. Its fortunes only worsened as the cooling of investor interest, as well as an emphasis on profitability, hurt global funding sentiments.

Currently, his financial troubles have reached the point where he is unable to pay both his former employees – including the nearly 200 he laid off in February – and the teachers, who teach KG-9 classes in a variety of materials. She is also unable to repay her debts to her customers, lenders, vendors and various creditors, which facilitated her decision to file for insolvency.

“I have not received my two months salary and incentives amounting to approximately Rs 86,000 despite the company having made multiple payment commitments in the coming months. I even received my full and final settlement calculations from the HR department, but the money has not been credited yet,” said Abhinav Kumar, who worked as a Senior Business Development Associate at Lido.