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Lido News: Lido sends final settlement offers to its employees

Edtech firm Lido Learning has sent final settlement offers to its employees, multiple sources told ET.

According to the offer, employees will be paid 50-75% of their dues, which will be settled in two weeks.

About 75% of its employees have accepted the final settlement offer.

Teachers, educators, counsellors, and administrative staff have also received a similar offer, the people said requesting anonymity.

ET has reviewed a copy of the final settlement offer.

Once they sign the offer, the employees cannot take legal recourse, two workers who received the settlement offer told ET.

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However, teachers and other employees are not clear if their dues would be settled even after signing the document.

Parents and children have also expressed concern over the stoppage of classes and whether their fees would be refunded.

“I haven’t received the last three months’ salary and incentives despite the company making multiple commitments. Now, they have sent a full and final settlement calculation,” said a teacher who taught a cross section of batches.

With no tutors left to teach, several parents have approached the police with complaints against the company over the past weeks.

According to a cross-section of teachers, some teachers of higher grades were retained and put on a two-week term break from the last week of August. Further, other teachers who have been asked to quit and not paid salaries, are contemplating legal action.

Lido Learning, which had earlier explored the option of a merger, initiated bankruptcy proceedings in the first week of September as the cash-strapped company struggled to pay teachers and its former employees.

Lido Learning founder Sahil Sheth did not respond to emails till press time Sunday.

The company’s board passed a resolution to file an application under Section 10 of the Insolvency and Bankruptcy Code during an extraordinary general meeting held on September 5, filings with the Ministry of Corporate Affairs (MCA) showed.

Founded in 2019, Lido Learning offers live online tuition classes to children from kindergarten (KG) to Grade 9 across mathematics, science, English, and coding.

For fiscal year 2020-2021 (FY21), Lido Learning saw a three-fold jump in revenue to Rs 10.9 crore from Rs 3.62 crore in the year ago period.

The company’s losses also ballooned to Rs 58.7 crore, from a Rs 43.5 crore loss in FY20.

Expenses jumped 49% to Rs 70 crore in FY21.

The startup has yet to file financial statements for FY22.

In September last year, the company said it had raised $10 million (about Rs 73.4 crore) from Ronnie Screwvala’s Unilazer Ventures, taking its overall funding to $20 million.

Other backers include Bace Ventures, Picus Capital, 9Unicorns, Paytm founder Vijay Shekhar Sharma, Myntra and Cultfit founder Mukesh Bansal, People Group’s Anupam Mittal, and Mensa Brands founder Ananth Narayanan.

As global headwinds continue to dampen the overall funding sentiment, several ed-tech firms have shifted to cash-conservation efforts in a bid to increase their cash runway.

Edtech startups have been facing the brunt of the funding slowdown and bigger players including Vedantu and Unacademy have resorted to mass layoffs.

Last week, Byju’s, India’s most valued startup, finally
posted its audited results for FY21 after an 18-month delay.

The startup posted a loss of Rs 4,588 crore, up from a loss of Rs 262 crore in the previous fiscal year.

Revenue from operations were also readjusted to Rs 2,280 crore due to a change in its accounting practices.

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