Struggling Edtech Startup Lido Learning to file for Insolvency

Lido Learning

Lido Learning, a struggling edtech startup that has been in the news since the beginning of 2022 for all the wrong reasons, will declare corporate insolvency, according to a regulatory filing.

The startup’s board consented to petition for insolvency under the terms of Section 10 of the Insolvency and Bankruptcy Code, 2016, during an extraordinary public meeting convened on September 5, since it was unable to pay its debts to its ex-employees, clients, suppliers, lenders, and other creditors.

Reliance Industries Ltd was reportedly planning to invest in Lido in June of this year, according to news site The Morning Context. After Lido’s negotiations for a potential acquisition deal with several edtech unicorns fell through, Reliance entered the picture.

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

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

The startup, which has so far secured approximately $24 million in funding across three stages, reported total revenues of INR 11.3 crore in FY21, up nearly 200% 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 FY20.

From INR 47.3 Cr in FY20 to INR 70 Cr in FY21, Lido’s expenses increased. The startup hasn’t yet submitted its FY22 financial statements.

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

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