Ronnie Screwvala-backed Lido the latest Indian edtech startup to go bankrupt

Ronnie Screwvala-backed edtech startup Lido Learning has filed for insolvency and bankruptcy, just a few months after laying off 1,200 employees amid a rising funding crunch.

According to a regulatory filing 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 the Insolvency and Bankruptcy (IBC) Code 2016.

“Resolved that pursuant to Section 10 of the Insolvency and 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 Law Tribunal,” the company said in MCA filing.

The company also defaulted on payments to former employees, according to media reports.

Entrackr was the first to report about the bankruptcy.

The development comes as the demand for online education is slowing and investor confidence is waning and edtech startups, which were once the darlings of investors, have been facing a funding crunch and resorting to drastic steps, including layoffs, to stay afloat. According to data from DealStreetAsia’s DATA VANTAGE, edtech startups in India raised $290.4 million in Q2 2022, which is 80% lower than the $1.4 billion amassed in the preceding quarter.

A clutch of edtech startups such as Crejo.Fun, Udayy and SuperLearn have also shut their operations.

Founded in 2019 by ex-BYJU’S employee Sahil Sheth, Lido offers live online classes to children from KG to Class 9 for Maths, Science, English and Coding, catering to Indian and Middle-Eastern markets.

It raised $23 million over the course of its existence and $10 million in September 2021 from Ronnie Screwvala’s Unilazer Ventures.

There were also media reports in June about Reliance Industries being in talks to invest in Lido. However, it was not immediately clear if the funding talks materialised then.

Besides institutional investors, it also counts Paytm’s Vijay Shekhar Sharma and Shaadi.com’s Anupam Mittal as its angel investors.

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