Struggling Edtech Startup Lido Learn How to File for Insolvency

Lido Learning, a struggling edtech startup that has been making headlines since early 2022 for all the wrong reasons, will declare the company insolvent, according to a regulatory filing.

The startup’s board of directors agreed to seek insolvency under Section 10 of the Insolvency and Bankruptcy Code, 2016, at an extraordinary public meeting convened on September 5, as it n was unable to pay its debts to its former employees, customers, suppliers, lenders and other creditors.

According to news site The Morning Context, Reliance Industries Ltd planned to invest in Lido in June this year. After Lido’s negotiations for a possible acquisition deal with several edtech unicorns failed, Reliance came into the picture.

Five months after raising $10 million in a round led by Ronnie Screwvala’s Unilazer Ventures, Lido laid off the majority of its employees in February 2022. A new round of funding was reportedly discussed at the time by the startup. The lead investor pulled out, leaving Lido in a bind, so the deal never happened.

Lido had promised to pay the employees their due salaries within 90 days when he fired them. However, several tweets from former Lido employees accusing the company and its creator Sahil Seth of failing to pay their unpaid wages appeared on Linkedin months later.

The startup, which has so far secured approximately $24 million in three-stage funding, reported total revenue of INR 11.3 crore in FY21, up nearly 200% from from INR 3.7 crore in FY20, while its loss increased to INR 58.7 crore, up 34.9%. from INR 43.5 crore in FY2020.

From 47.3 Cr INR in FY20 to 70 Cr INR in FY21, Lido spending has increased. The startup has yet to submit its FY22 financials.

With the most recent development, Lido Learning joined the ranks of SuperLearn, Alpha Wave-backed Udayy and Matrix-backed Crejo.Fun, and Udayy as the fourth edtech startup in the country to cease operations in 2022.

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