Tencent has scrapped plans to invest over USD 150 million in the Beijing-based English tutoring startup VIPKid, due to the Chinese government’s stricter regulations on the online learning sector, according to a Reuters’ report.
The move comes after Beijing issued tighter rules last month. The new regulations want teachers to hold valid teaching certificates and require platforms to publicize foreign teachers’ working experience and other information.
VIPKid denied this news while Tencent didn’t respond to Reuters’ request for comment.
As an online English learning platform, VIPKid connects Chinese students with native English-speaking teachers for live video sessions. With more than 70,000 teachers and over 600,000 students, the five-year-old startup claims to be the largest edtech company in the world.
In January, VIPKid was reportedly seeking a fresh USD 500 million round of funding, later lowering its goal to USD 150 million. The plan didn’t go well since some investors were skeptical of its business model, according to the sources.
Previously, VIPKid raised USD 500 million in its series D+ financing in June 2018. Tencent, Coatue Management, Sequoia Capital and Yunfeng Capital led the financing round, valuing the edtech at over USD 2.8 billion.
