A sub-brand of Chinese online education firm VIPKid has secured $80 million in a Series A round of financing led by Sequoia Capital China, and the country’s social and gaming giant Tencent.
The sub-brand, introduced on Monday, was named as “Dami Wangxiao (Rice eSchool)” to offer live-streaming English and math courses to primary students in China.
The new brand was created from the combination of VIPKid’s self-developed platforms, “VIP Fengxiao” and “SayABC,” which both provide Chinese students with online English education. The brand has been “incubated and polished” by the company for over one and a half years, according to a company statement obtained by DealStreetAsia.
The brand was launched to meet the demand of over 700,000 students currently served by VIPKid, said founder and CEO Cindy Mi Wenjuan in the statement.
“Many student users have entered into an examination period [for the admission to a higher-level educational institution] after a few years of study on the VIPKid platform. They are in urgent need of an extracurricular training product that can help them balance in-class learning and improve math capability,” said Mi.
She observed a growing demand for exam-oriented English and math education among Chinese primary students at grade three and above, and for cost-effective online education products from families in third and fourth-tier cities.
Bejing-based VIPKid operates as an online education platform that connects children in China with native English-speaking teachers in the United States and Canada for live video lessons. The company, established in October 2013, recorded over 700,000 students and more than 90,000 teachers as of August 2019, as per a previous company statement.
The company announced in October 2019 the completion of a Series E round led by Tencent, roughly one month after Reuters cited sources that Tencent had shelved plans of the investment of about $150 million in VIPKid amid China’s tightened oversight of online education platforms.
Despite VIPKid and Tencent did not disclose the financial terms of the previous round, official statistics show that VIPKid was valued at over 20 billion yuan ($2.87 billion) after a $500 million Series D+ round from Coatue Management, Tencent and Sequoia Capital China in June 2018.
The online education market in China is projected to reach 315 billion yuan ($45.19 billion) by 2020, according to Chinese research firm Qianzhan.
In order to better supervise the industry, Beijing issued regulations last July, stipulating that teachers need to hold valid teaching qualifications and online education platforms must publicize information including foreign teachers’ certificates and work experience.