Last month, Reuters reported that Tencent scrapped plans to invest $150 million in VIPKid, a company that connects Chinese students with North American tutors for English lessons. Last week, the Wall Street Journal refuted that story, saying that the Chinese internet conglomerate is going through with the investment after all.
Both outlets cited anonymous sources familiar with the matter. A VIPKid spokesperson declined to comment when reached by EdSurge.
VIPKid originally intended to raise up to $500 million, on top of a previous $500 million round in June 2018. The Beijing-based company has raised more than $825 million in venture capital since its founding in 2013.
Sources for the Journal reported that Chinese e-commerce company Alibaba and KKR, a U.S. private equity firm, had passed on investing in this round, and that a previous investor in VIPKid had tried to sell part of its stake.
VIPKid has one of the largest footprints among online English tutoring services. The company claims its platform is used by over 70,000 North American teachers who tutor more than 600,000 children. But the experience is not always seamless; some teachers have been in trouble for raising topics that are politically sensitive to China. Others have reported instances of child abuse, as EdSurge exclusively reported.
According to an analysis from EdSurge Intelligence, Chinese tutoring companies have raised more than $2.8 billion since 2010, far surpassing that for their counterparts in India and the U.S. But investors’ enthusiasm may dampen in light of Beijing’s recently issued guidelines that seek to regulate the content and quality of online instruction for Chinese education companies.
