VIPKid, a China-based online tutoring service backed by internet group Tencent, is close to raising $500m at a $3bn valuation, Bloomberg has reported, citing people familiar with the matter.
Founded in 2013, VIPKid runs a platform allowing Chinese families to access tutoring services from an international network of teachers, many of which are North American. It generated RMB3.54bn ($559m) in ‘cash sales’ in 2017, according to Bloomberg.
The company has a customer base of almost 300,000 students who are served by nearly 39,000 tutors, but aims to increase those numbers to 2.4 million and 280,000 by the end of 2019.
VIPKid has raised at least $325m including $200m in an August 2017 series D round led by Sequoia Capital China and backed by Tencent, Yunfeng Capital, Zhen Fund, Matrix Partners China and Sinovation Ventures at a $1.5bn valuation.
Sequoia Capital and Yunfeng Capital co-led a $100m series C round for VIPKid in 2016 that was followed by an investment of undisclosed size by Bryant Stibel Investments shortly afterwards.
Matrix Partners, Sequoia Capital China, Learn Capital, Northern Light Venture Capital and Innovation Works had supplied the earlier funding across series A and B rounds in 2014 and 2015 respectively.
The prospective funding comes as another China-based online education provider, iTutorGroup, is in the process of raising $300m at a reported valuation of $2bn. A third, Knowbox, secured $100m in series C funding last week.