“Currently, he is building an AI startup aimed at revolutionizing healthcare by making it dramatically easier for doctors and patients to navigate the system. This venture promises to deliver transformative efficiency while achieving substantial cost savings,” read a post on his profile on professional networking platform LinkedIn.
According to updates on his profile, the venture has been in the works for almost two years, and Sheth is now actively hiring for the company.
But even as he looks to the future, the Lido story is far from over and unresolved issues continue to resurface, Mint has learnt.
Ghost of the past
Several former employees of Lido, many of whom are still awaiting unpaid dues, say they haven’t forgotten. For them, Sheth’s new beginning is a reminder of what was left unfinished, according to two former employees who spoke to Mint.
Himani, a 26-year-old former employee of Lido, waited nearly two years before losing hope of reconciliation. “I am planning to file a lawsuit. I cannot let this go,” Himani told Mint. She is still owed close to ₹80,000.
Another former employee, 30-year-old Vishal Burnwal, who was asked to leave Lido, said he was left without options after the company filed for bankruptcy and Sheth moved to the US.
“I have filed so many FIRs, only to get no response. They made a fool out of us. No one supported us,” he said. Lido owes approximately ₹75,000 in dues to Burnwal, following a sudden termination.
Himani and Vishal are among nearly 1,200 employees of Lido Learning who were abruptly asked to resign in February 2022 without receiving their January salaries, citing a financial crisis in the company. Most of them, largely from the sales and marketing teams, were left without a repayment of their dues, which range from ₹20,000 to ₹80,000 each, amounting to potentially up to ₹5 crore, Moneycontrol had reported back in 2022.
Founded in 2019, Lido Learning promised personalized online coaching and live tutoring for school students. At its peak, it had over 1,500 employees and raised nearly $25 million from prominent investors such as Ronnie Screwvala’s Unilazer Ventures.
However, in September 2022, Lido filed for insolvency in the Mumbai bench of the National Company Law Tribunal (NCLT), citing its inability to pay employees, vendors, customers, and lenders.
Lido is among a clutch of education technology companies that raised funds during the pandemic-led boom in online learning, but lost sheen immediately as the restrictions started easing up.
It also ended up in the list of edtech startups that shut shop following that, with others like Stoa School, Bluelearn, and Udayy, due to increasing investor skepticism on the sector owing to reducing demand and fall of biggies like Byju’s. According to a recent report by Business Standard, over 2,000 startups in edtech sector shut shop in the past five years.
But did Lido really shut shop?
In Lido’s case, while the company did file for bankruptcy, the company never shut down.
The last remaining batch of Lido, of roughly 5,000 students, and about a dozen employees, found a second life in a lesser-known acquisition by Sri Chaitanya Educational Institutions, a group of educational institutions in India, which absorbed it within its newly launched edtech Infinity Learn, a source close to the development told Mint.
Today, Infinity Learn claims to serve over 7 million learners and has made three known acquisitions: Wizklub, Teacherr, and Don’t Memorise. Yet, it makes no mention of Lido’s role in the company.
“When the company was on the verge of closure, we inducted a few of their team members in the engineering and the customer service spaces. With students, on the other hand, the sole purpose was to tend to their needs and ensure their educational journey continues seamlessly sans obstacles. There was no business motive to it,” said Ujjwal Singh, founding CEO of Infinity Learn by Sri Chaitanya, in response to Mint’s request for comment.
Singh said that the batch was taught for free for a year, adding that “there was no formal acquisition or transaction.”
This came after multiple media reports in June 2022 said that Reliance Industries is expected to plough lifeline funding into the company. Mint could not independently verify if the deal fell through.
Meanwhile, the insolvency case filed by Lido at the NCLT Mumbai bench has been disposed. According to a notice on the NCLT website dated 8 May 2024, the case was withdrawn by the company.
“Though the matter was listed on several occasions it was not called due to paucity of time. On 8 May 2024 the matter was withdrawn by them,” said Piyush Agrawal, partner at AQUILAW. “Since no order was passed for admission or initiation of CIRP (corporate insolvency resolution process), the company can withdraw the proceedings without any approval requirements. Had the CIRP proceedings been admitted, such withdrawal could have only happened after approval of 90% vote from COC (committee of creditors).”
It is also unclear if the investment in the company was written off or reached a settlement.
The company, according to analytics firm Tracxn, is active on the Ministry of Corporate Affairs website. In fact, Lido has called for board meetings as recently as 2024, as per RoC fillings. Lido has also reported its financials for FY24 with the MCA. In FY24, Lido’s revenue plummeted by 97% to just ₹26.4 lakh, while net loss ballooned to ₹6.4 crore, marking a staggering 1,811% increase in losses over the previous year, as per data from Tracxn.
Multiple requests for a comment to Sheth did not elicit a response at the time of publishing. Unilazer Ventures did not respond to a request for comment.
Hustle without accountability
In Lido’s case, since the company was not admitted into the corporate insolvency resolution process, employees still have a legal recourse.
According to Abdullah Qureshi, associate partner, IndiaLaw LLP, the employees or other creditors can file an application under Section 65 of IBC objecting to the admission of the company petition, alleging mala fide intent to defraud legitimate creditors.
“Employees retain the right to initiate independent proceedings under Section 9 of the Code for recovery of their outstanding dues in their capacity as operational creditors, provided that the debt amount of each operational creditor exceeds the ₹1 crore threshold under Section 4 of the Code,” said Qureshi. Employees can also explore civil remedies such as filing suits for recovery of unpaid salaries.
But such cases raise a question on founder accountability and whether entrepreneurs can restart without closure for those affected by their previous ventures?
An expert in HR practices, Rituparna Chakraborty, co-founder of Teamlease Staffing, who works closely with startups, said that in such cases founders can legally restart despite ethical concerns, highlighting how power, networks, and technicalities often override fairness to employees.
“Founders are able to navigate the system because either they are very well-networked or they’ve built structures that protect them, even when employees suffer,” said Chakraborty. “The company was a limited liability set-up, once it files for bankruptcy, the legal boundaries are pretty clear. It doesn’t mean it’s ethical, but it is legal.”
