VIPKID, a Chinese provider of English-language services, announced that it has raised $200 million in financing, a huge infusion of capital the company says will support its development on a number of fronts—including the expansion of its teaching in Mandarin.
The Beijing-based company‘s new round of Series D funding was led by Sequoia Capital, and joined by strategic investor Tencent, as well as existing stakeholders Yunfeng Capital, Matrix Partners China, and the Zhen Fund.
The company boasts that it now has 20,000 teachers delivering daily lessons to 200,000 students from 32 nations. The vast majority of its business comes from the English-language services it offers to families in China.
VIPKID says its monthly revenues have now reached 400 million renminbi, or $60 million in U.S. dollars, with projected annual revenues of $750 million, U.S.
Series D funding refers to investment that comes to companies that are well past the early stage of their development, but which are typically still looking for capital to pay for development and expansion.
VIPKID says it will use the $200 million in new funding to support work on several areas. Those include improving the company’s current educational offerings, by focusing on boosting teacher quality and enhancing its textbooks and online classrooms; promoting Lingo Bus, a new platform for teaching Mandarin online; and expanding the company’s philanthropic work. (The company says that it will work with a partner, the Jack Ma Foundation, to expand its online education program in rural areas of China from five schools to 100 this year.)
VIPKID, which was founded in 2013 and officially launched in 2014, currently recruits its teachers primarily from the United States and Canada.
“We need to be able to find and select the best teachers across North America,” said Cindy Mi, the CEO and founder of VIPKID, in an interview. But she noted that “even the best teachers need great content. Content is critical. We need to be able to motivate students, and make them curious” about their learning.
Lingo Bus is a new product that VIPKID touts as the “world’s first fully immersive online Chinese learning program,” and one aimed at “bringing China to the world and bringing the world to China.” The company says its goal is to lure 50,000 paid users and 10,000 teachers who are professionally trained in Mandarin over the next three years.
Currently, the vast majority of demand for VIPKID’s English-language business comes from China, Mi said. But the company is keen on exploring opportunities for growth in other markets. Mi named Japan, South Korea, Europe, and Southeast Asia as countries and regions the company views as ripe to receive its language offerings.
Much of the expansion VIPKID is counting on in foreign markets will occur through word-of-mouth referrals about its English-language services passed among parents, word-of-mouth recommendations that are a key part of the company’s business model, Mi said. The company sees great potential to promote its Mandarin-language services in the United States, she added.
“There is a gigantic opportunity in K-12 across the globe,” the VIPKID official said. “Our international market is very naturally and organically growing itself.”
Dowson Tong, the senior executive vice president and social network group president of Tencent, said in a statement that her organization was impressed with how VIPKID had “efficiently distributed education resources” in both the United States and Canada in a relatively short time. The company has given tens of thousands of teachers the ability to earn supplementary money by teaching English, the Tencent official said.
Neil Shen, the founding and managing partner of Sequoia Capital China, said he was impressed by VIPKID’s “rapidly growing user base and diversifying product portfolio,” which has made it “the leader of the massive online education market.”
VIPKID says its strategic partnership with Tencent, a China-based internet services company, will allow the organizations to work together on building out the language provider’s tech infrastructure and capacity for cloud computing, artificial intelligence, and online education.
Mi said that VIPKID will bring an extensive amount of data to the partnership, which will allow the two companies to work together in the hope of creating “personalized learning paths for every child.”