After months of rumour, Chinese online education unicorn VIPKID finally confirmed that it had completed it latest round of funding on Tuesday.
Tencent is the sole investor of its Series E fundraising. VIPKID hasn't released how much it has raised, but according to a source familiar with the matter it is understood to be around $150 million.
Both Reuters and Dow Jones confirm that Tencent had planned to invest $150 million in VIPKID.
Even though Beijing has tightened its oversight of online education platforms, this hasn't stopped Tencent from doubling down on this online education unicorn. The Chinese internet giant was one of the lead investors of VIPKID's $500 million Series D funding in June last year.
Over the past year, VIPKID has doubled both its teacher and student numbers to more than 90,000 and 700,000 respectively.
Its war chest is helping VIPKID pull ahead of its rivals in online English education. The company already has a 68.4% share of the market, according to research firm Trustdata.
The online English education market in China is likely to hit Rmb50.3 billion ($7.03 billion) this year, up 157% on 2018. About 70% of new added users choose VIPKID to teach them.
“VIPKID has taken more than half of the market in online English education,” one analyst from a Chinese research company told FinanceAsia. “People have developed a habit for online learning, so we can see the demand increasing.”
“There is a strong Matthew Effect in this market,” the analyst added referring to the economic theory of accumulated advantage. “VIPKID has expanded its lead a lot. The market share of its rival 51Talk has halved to 10% since 2017.”
VIPKID was valued at Rmb20 billion after its fundraising in June last year. And since it was founded in 2013, the company has raised at least $925 million. Tencent has been a shareholder since 2017.
As VIPKID becomes the undoubted leading player in English online education, when can we see it turn profitable becomes the only question left for VIPKID.