Byju’s may shut down WhiteHat Jr, the startup once touted as the best acquisition

Byju's may shut down WhiteHatJr to make a sizeable cut to its operating expenses. The company has been spending $14 million a month on WhiteHat Jr. for months now.

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When Byju’s acquired WhiteHat Jr for a whopping $300 million two years ago, little did anyone know that the runway for the coding platform would soon be cut short by India’s most valued, as well as most controversial, startup.

Citing a few unnamed sources, TechCrunch reports that Byju’s is considering pulling down the curtains on WhiteHat Jr., the startup it acquired for a jaw-dropping $300 million. The decision is influenced by the immediate need to reduce expenses and eliminate a unit that has been criticized a lot.

In recent weeks, the Bengaluru-headquartered startup, which arguably attains a valuation of $22 billion, has held conversations about shutting down WhiteHat Jr., TechCrunch reports. The discussion, however, hasn’t reached a conclusion point, and a final decision is yet to be taken.

These discussions are occurring at a time when Byju’s is actively looking to offload extra baggage as much as possible in a bid to optimise their operating expenses. It’s estimated that Byju’s spent about $14 million every month on the coding platform.

Seeking more clarification on the report, we wrote to Byju’s and are now awaiting their response.

WhiteHat Jr was acquired by Byju in 2020 for $300 million. However, a significant portion of the payout was tied to future growth metrics. This meant that Byju’s ultimately spent less than $235 million on the acquisition deal.

The coding unit has been criticized for making misleading claims, poor teaching and aggressive strategies to lure students and make them signup. Instead of handling the criticism in a constructive way, WhiteHat Jr decided to go after critics and sued a few of the critics. The strategy, however, fired back, and the company decided to withdraw most of it later. Karan Bajaj, the founder of WhiteHat Jr, parted ways with Byju’s one year after the acquisition. He has reportedly been in contact with investors in recent weeks to raise funds for his new startup, which is still under the wrap.

Backed by marquee investors, including Sequoia India, Lightspeed Venture Partners, Tiger Global, B Capital and UBS, Byju’s was busy courting a series of allegations against the firm. The company clarified that it had discouraged the practice of its salespeople visiting students’ homes to pitch to their parents. The firm now runs a test to see if a child’s parents are able to afford the service before signing them up.


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