China-based online tutoring platform VIPKid is set to raise $150m in funding from internet company Tencent after reports last month suggested the corporate had pulled out of a deal, the Wall Street Journal reported yesterday.
Tencent had reportedly made a verbal agreement to participate in a $500m funding round that would have valued VIPKid at $4.5bn, before the company reduced the round’s target size and allegedly lost Tencent’s commitment at the end of August, though VIPKid denied those rumours.
Founded in 2013, VIPKid operates an online education platform that connects Chinese pupils to English-speaking tutors in North America through video chats for one-on-one language classes.
The company also runs Lingo Bus, a separate offering that provides immersive online classes for children to learn Mandarin Chinese, and SayABC, a platform teaching English through tutors as well as features such as games and pre-made videos.
VIPKid’s troubles in closing the round were due to concerns around its business model, WSJ said, and Reuters had previously suggested Tencent’s withdrawal had been due to government regulations that tightened up qualifications for online teaching.
The company’s total funding currently stands at more than $825m. It closed 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 valuation of $3.1bn.
Tencent had already participated in a $200m series D round for VIPKid in 2017 that included ZhenFund, Sinovation Ventures and returning backers Sequoia Capital China, Yunfeng Capital and Matrix Partners China.
