New Delhi: Lido Learning, a Ronnie Screwvala-backed ed-tech startup, has filed for insolvency and bankruptcy with the National Company Law Tribunal’s Mumbai bench, six months after asking over 1,200 employees to resign due to a cash crunch.
According to the company’s regulatory filings with the Ministry of Corporate Affairs, Lido Learning’s board of directors has passed a special resolution to file an application under Section 10 of the Insolvency and Bankruptcy Code 2016. (MCA).
Lido has failed to repay debts and has fallen behind on payments to former employees. Interim Corporate Resolution Professional Anil Drolia has been proposed. Entrackr was the first to report the news.
Employees received a full and final (F&F) settlement letter from Lido and verbal assurances from HR that their salaries would be paid by the end of June. However, the majority of employees have yet to receive even a single rupee.
Lido, founded in 2019 by former Byju’s vice president Sahil Sheth, asked more than 1,200 employees to resign during a video call town hall conference in the first week of February, citing a funding shortage.
Sheth also stated that all employees would be paid within three months and that the company was looking to sell assets in order to fund employee salaries.
Lido Learning’s bankruptcy filing comes at a time when startups in India are increasingly showing signs of distress, with funding to the ecosystem slowing. ShopX, which is backed by Nandan Nilekani, recently declared bankruptcy as well.