China’s education startup VIPKid said to be raising funds at over $3b valuation

VIPKid is finalizing a deal to raise about $500 million at a valuation of more than $3 billion, according to people familiar with the matter, a price tag that could make it the world’s largest online education startup.

The Beijing-based service, which links mainly North American tutors with Chinese children, is putting the finishing touches on a deal, said the people, who declined to be named because the matter is private. Its targeted valuation is pre-money or prior to closing, they added. A successful transaction would roughly double its valuation in less than a year.

Getting foreign teachers to tutor students over the internet is big business in China, thanks to an increasingly affluent middle class and job market that prizes both education and English-language proficiency. The online English-tutoring market is on track to hit 52 billion yuan ($8 billion) by 2019, according to iResearch.

That’s attracting investors: iTutorGroup is raising as much as $300 million at a valuation of about $2 billion and preparing for an IPO next year. Leading players such as New Oriental Education & Technology Group Inc. and TAL Education Group have gone public in the U.S. and seen their shares soar. Other companies competing in the space include DadaABC and 51Talk.

VIPKid reported a near six-fold jump in ‘cash sales’ to 3.54 billion yuan in 2017, including multi-year contracts, based on presentation materials for investors obtained by Bloomberg News. Chief Executive Officer Cindy Mi told Bloomberg in September her company should rake in revenue of 5 billion yuan or about $750 million in 2017. A VIPKid spokesman declined to comment on the fundraising but said the company’s cash sales for the fiscal year ended March was about 5 billion yuan.

VIPKid had 296,363 students and 38,724 teachers as of 2017 — a sharp increase from the 3,305 students and 404 educators it had just two years earlier, according to its investor materials. By 2019, it’s projecting a near 10-fold rise in students to 2.4 million, and 281,369 teachers.

Also Read:

China’s edtech startup iTutorGroup seeks $2b valuation ahead of IPO

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.