Internet group Tencent has withdrawn from a planned $150m investment in China-based online tutoring platform VIPKid, Reuters reported yesterday, citing two people with knowledge of the matter.
Tencent had verbally agreed to provide the money as part of a larger funding round it was set to lead at a $4.5bn pre-money valuation, according to the sources. VIPKid had initially aimed to raise $500m before dialling down that target to $150m.
The corporate pulled out due to recent government regulations that tightened up the qualifications process for online teaching.
Founded in 2013, VIPKid runs an online platform that allows Chinese children to access a network of some 70,000 English-speaking tutors in North America for language lessons that are conducted through video chats.
VIPKid denied the details in the article were accurate, saying in a statement emailed to Reuters: “While the details of any fundraising are of course confidential, we can confirm that Tencent, along with several leading investors are currently in fundraising conversations with VIPKid.
“Any media reports to the contrary are completely false and we look forward to correcting the record.”
The company has raised more than $825m so far, most recently closing a $500m series D-plus round in June 2018 that was co-led by Tencent, Coatue Management, Sequoia Capital and Yunfeng Capital at a reported $3.1bn valuation.
Tencent also took part in VIPKid’s $200m series D round the year before, participating alongside ZhenFund, Sinovation Ventures and existing investors Sequoia Capital China, Yunfeng Capital and Matrix Partners China at a $1.5bn valuation.
