Bankrupt Lido Learning’s Sacked Sales Staff Gets Threat Calls From Parents
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Several of Lido Learning’s former sales executives have been receiving threat calls and messages from angry parents and students since the celebrated edtech start-up filed for bankruptcy with the National Company Law Tribunal’s (NCLT) Mumbai branch on September 8.
Founded in 2019 by former Byju’s vice-president Sahil Sheth, Lido offered live online tuition classes to students from kindergarten to class 9 in math, science, English and coding of CBSE and ICSE boards.
The company started sinking after three years of its incorporation. The start-up, backed by high-profile investors, including Upgrad founder Ronnie Screwvala, Paytm CEO Vijay Shekhar Sharma and Shaadi.com’s Anupam Mittal, among others—abruptly fired around 1,200 employees in the first week of February, Moneycontrol had reported.
The company’s Board had passed a special resolution to file an application under Section 10 of Insolvency and Bankruptcy (IBC) Code, 2016, according to its filings with the Registrar of Companies after failing to pay back loans and defaulting on payments to former employees, Entrackr had exclusively reported.
Now, angry parents and students are sending threatening messages to Lido’s former employees, Moneycontrol reported.
“You have cheated us.” This was one of messages received by a sacked employee on the morning of September 9 when the news of Lido’s bankruptcy had spread like wildfire. “We are definitely going to the police against you and your fraud company. What does bankrupt mean? We want our money back anyhow,” stated another message.
“At first, I thought of ignoring these messages as I was no longer associated with Lido. But those messages were hounding me. Parents were feeling helpless and students were stranded,” the employee told Moneycontrol.
Admitting that the anger of parents was “obvious” and not knowing how to react, the employee said, “Honestly, nothing is in my hands as such and it’s not like I am getting or I was getting tonnes of money either at Lido. Their [parents] anger is obvious and whatever little glimmer of hope they had of getting their money back vanished after reading about Lido Learning’s bankruptcy.”
Other employees have stopped stepping out in their neighbourhoods due to the fear of parents calling them cheats. They are being hounded by parents since February when the news of Lido looking to shut down first broke.
Another former employee Priyanka Pansari doesn’t have the “courage to face parents living in her locality to whom she had sold Lido Learning’s courses since March” as classes were cancelled.
Pansari, now a sales executive with Ufaber, an edtech company offering courses on domains like IELTS, UPSC and GATE, added, “In small towns, you know everyone personally and so many of us had sold courses to our acquaintances.”
One of the parents to whom Pansari had sold Lido’s courses has hearing and speech difficulties. “It was really hard to explain to them what happened with Lido Learning and why classes were stopped.” The family now “hates” her.“We had very good family relations with them, but they all now hate me and my father and I have not been able to even apologise to them. I feel guilty for not actually doing anything wrong and it’s not a great feeling,” she said.
Most Lido subscribers belong to lower-tier town and some of them are now scared of online coaching altogether while others cannot afford to pay again for their child’s tuition.
“We took Lido’s subscription for the first time in mid-2021 during the second wave of the pandemic,” a single parent from Asansol who had taken an annual subscription of Rs 18,000 for two years for her fifth-grade child said.
“We took it only because of P (a sales executive) as we know her since she was a child. I am not blaming her but we feel scammed. I have paid Rs 36,000 in three tranches since last year for two years but regular classes stopped in March. So, technically, I have lost Rs 18,000 straightaway (one year’s fees),” the parent, who has studied only till 5th grade.
“I can’t teach my kid on my own and I don’t think I will be able to put him in another tuition. I want my money back and that too with interest,” the parent added.
Another parent had to reluctantly “beg” her neighbour who takes classes at her home to teach her kid for the rest of the year.
Several parents took zero-interest loans for subscriptions as Lido has tie-ups with various financing partners, including Bajaj Finance, which offer zero-interest education loans and paid subscription fees to it and collected EMIs from parents.
Despite classes not being held, parents who took loans are paying EMIs. One of the parents was warned by it financing partner that the credit score might get affected and loan recovery agents could also come to the house, in case, of non-payment of EMIs.
“We have saved a lot over the years to buy a house and had planned to take a loan next year. We were told that we might not get any more loans if we fail to pay the EMIs and someone from the company might also come to recover the loan,” the parent said.
“Here in small societies, it’s embarrassing if loan recovery agents come. So, we are in a way compelled to continue paying the loan even as classes had stopped long back,” the parent said adding that the plan of buying a new house has been shelved.
A senior employee at a top education financing platform explained that the edtech company in such cases has to notify the financing company to stop collecting EMIs as the subscriptions stand cancelled. If the edtech company does not notify, the parent’s name goes as ‘defaulter’, which in turn hits their credit score, the employee said.
“It all mostly depends on the clauses mentioned under the contract but broadly speaking, we can’t afford to lose money. We will have to collect EMIs from parents—it’s between them and the edtech,” the employee added.
“Genuinely feeling bad for parents in situations like these” the employee said that “unless we get notified from the edtech company, we can’t cancel their EMIs. If the edtech company notifies us, then we can stop collecting EMIs from parents and rather collect it from the edtech company as we have paid money to them on behalf of parents”.
Lido started facing a funding crunch only four months after raising $10 million from Screwvala’s Unilazer Ventures. The start-up, which has not filed its FY22 financial results, had reported a loss of Rs 58.8 crore in FY21 on a revenue of Rs 11.3 crore.
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