Beijing-based online education platform VIPKid on Tuesday announced the completion of a Series E round of financing led by Tencent Holdings.
Financial terms of the new round were not disclosed. According to previous media reports, VIPKid was targeting to raise as much as $500 million in the round and eyeing a valuation of $4.5 billion, up from $3.5 billion in 2018.
VIPKid did not immediately respond to DealStreetAsia’s email seeking comments.
In a statement on its WeChat account, the education firm said the two companies will continue to deepen cooperation in the fields of internet education, artificial intelligence (AI), cloud services, and charitable education.
This is the third investment by Tencent into VIPKid. The Chinese tech major had earlier participated in the startup’s $500 million Series D+ round in June 2018 and a $200 million Series D round in August 2017.
There had been conflicting reports about Tencent’s decision to invest in VIPKid. In late August, Reuters had reported that Tencent had scrapped plans to invest about $150 million in VIPKid after Beijing tightened regulations on online education platforms in July, stipulating teachers hold valid teaching qualifications and the firms publicise information such as foreign teachers’ certificates and work experience.
In September, the Wall Street Journal said that Tencent was pushing to close the investment despite concerns among current and prospective investors over VIPKid’s business model.
VIPKid, founded in October 2013, is backed by investors including Sequoia Capital China and retired basketball star Kobe Bryant. The company has connected over 700,000 children, aged between four and 15 and living primarily in China, with more than 90,000 native English-speaking teachers in the United States and Canada for live video lessons as of August 2019, according to its statement.
“With the support of more talent, technologies and capital, VIPKid will provide more opportunities for every child to access customized education services and grow global competitiveness,” said Mi Wenjuan, founder and CEO of VIPKid.
The online education platform said it will increase investments in educational content, talent recruitment and technology to enhance operational efficiency to provide better products and services to students and their parents.