Chinese technology giant Tencent Holdings Ltd. is confirmed to invest $150 million in VIPKid, an online English teaching and education company, according to Chinese media 36Kr. This could bring a silver lining to China’s online education industry, as concerns arose among investors over the industry’s business model.
This round of fundraising started in mid 2018 after 8 rounds of funding. Four months ago, it was reported by the Financial Times that they were having trouble proceeding, which makes Tencent’s investment more significant.
“VIPKid is the star company who began the trend of online education. If it has trouble raising funds, it might influence middle-sized companies in the industry, or even the entire English education industry. ” said a person in the industry.
VIPKid started as a cross-border platform where Chinese kids can have a native speaker teaching them English one-on-one. After six years, it has become a unicorn valued at $4.5 billion.
The platform now has over 70,000 English teachers from North America and more than 500,000 paid clients. Apart from the original English education branch, it expanded its business to online Chinese learning with Lingo Bus, small teaching classes SayABC and K-12 learning for kids under 18.
To reach its goal of “profitability by 2020,” the language education company even stepped foot into mathematics education by launching an online program that teaches logical thinking to groups of four kids between the ages of 5-10 years old.