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Baiju is weighing whether to offload Whitehat Jr., a coding platform it acquired two years ago with an enterprise value of $300 million, as the edtech group looks to cut costs and shed a business unit that has drawn much criticism from the company.
The Bengaluru-based company, an Indian startup valued at $22 billion, has held talks in recent weeks to close what was once considered one of its best acquisitions, three sources familiar with the matter told TechCrunch. No decision has yet been reached, another person familiar with the matter said.
The talks come as Byjus cuts costs at the company. The company, which has laid off thousands of employees and scaled back marketing costs in recent quarters, was until recently spending $14 million a month on the coding platform, one of the sources said.
A spokesman for Biju declined to comment.
Baiju acquired Whitehat Jr. in 2020 for an enterprise value of $300 million. The hefty payout, however, is tied to future growth metrics, meaning Baiju ultimately spent less than $235 million on the buyout, according to one of the sources, who, like the others, spoke on condition of anonymity to discuss personal matters.
The code unit has been criticized by many for its misleading claims, teaching quality and aggressiveness towards court students. Whitehat Jr. sued some critics of the deal, a move that drew further backlash from the company. He later withdrew the charges. Whitehat Jr. co-founder Karan Bajaj (pictured above) has left a year after the Baiju acquisition, and according to one of the sources, he has been pitching to investors in recent weeks to raise funding for the new startup. He could not immediately be reached for comment.
Byju’s — which counts Sequoia India, Lightspeed Venture Partners, Tiger Global, B Capital, UBS and General Atlantic among its backers — has spent the past year addressing the many criticisms leveled at the company. Baiju said last month that its salespeople don’t visit students’ homes to talk to their parents, and the company is now testing whether children’s parents can sign up for the service before they sign up.
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