As Ukraine continues to be battered by Russia in an unprovoked war that has sent hundreds of thousands of refugees scattering elsewhere, a language learning startup hatched by Ukrainians has found traction growing outside of the country -- and today it's announcing a round of funding to take its ambitions to the next level.
Preply, which has built a marketplace where language tutors and would-be students of different languages connect for online learning sessions, has closed a round of $50 million. This is a Series C, and Kirill Bigai -- the now-Barcelona-based CEO who co-founded the company with Dmytro Voloshyn and Serge Lukyanov -- said the startup will be using the funds to continue building the technology that it uses to run the platform, as well as to build out more specialized content for its tutors to use.
Owl Ventures, a specialist VC focusing on education, is leading the round, with past backers Diligent Capital, Hoxton Ventures, Educapital, Evli Growth Partners and other backers such as Przemyslaw Gacek, co-founder of Grupa Pracuj; Swisscom Ventures; and Orbit Capital.
Notably, it has raised about $100 million -- $85 million of which has come in the last year; it's been around since 2012 and has largely grown through bootstrapping. And while it's not disclosing its valuation, PitchBook data puts the figure at just under $400 million post-money, a figure that the company did not dispute (nor confirm) when I put it to them earlier.
Bigai did note to me that the valuation was definitely at an "up round" compared to its previous raise -- $35 million in 2021 -- and that generally over the last several years it's been growing. "I feel lucky that we have a strong business and business dynamics," he said of the pressures in the current climate.
Preply (pronounced "Prep-lee") does not disclose how many students it has except to note that they are in the "hundreds of thousands," and it says that today there are some 32,000 tutors from 190 countries teaching over 50 languages. I should point out that in 2021 it said it had 40,000 tutors, but this is not a sign of the company business shrinking but of it simply tightening up and focusing on quality, as I understand it.
The company, as with most startups, is also fairly unspecific when it comes to talking about revenues: Bigai said it has not given year-over-year figures, but since 2019, he said the company has grown revenues and users more than 10x.
Building on the fact that its user base skews older than some other online learning platforms -- the average age is 25-40 rather than students -- it's also been doubling down on a newer B2B2C business line, providing services to companies whose employees need or want to improve their skills in a particular language. Customers for that business include Bytedance (and specifically TikTok), Mercedes and McKinsey, and Bigai noted that this segment of the business has been growing even faster, albeit from a smaller base.
Preply's germination, and its focus on "live" learning, comes out of the direct experiences of its founders. Bigai told me that he first came up with the idea for the company when living in Boston: he'd relocated from Kiev, having studied English for years in school, to build something. But it turned out that his on-paper knowledge of English had almost no relation to using it practically.
He quickly found a tutor to help him with conversation and learning the language in a more realistic way, and his lessons took place over Skype.
Eventually, he realized that this was the business he wanted to build: A way for people like him -- older and already out of school -- to really get to know a language and a way for them to find tutors more easily to do so.
One note on the company's Ukraine roots: Bigai and the other founders relocated the company back to his home country to build it after that initial idea started in Boston. Then, over the years, eventually Bigai himself -- and some of his staff -- relocated elsewhere. About one-third of the company was still in Ukraine when the war kicked off earlier this year. Now about half of those people are still in the country, and the rest have also left. (Those that stayed are now mostly in the Western part of the country away from the most serious action; and some are actually fighting, too.)
Just as the company's corporate profile has significantly evolved over the years, so too has its platform. Specifically, Bigai tells me that Preply uses machine learning algorithms to better match would-be students with teachers -- parameters include matching people in compatible timezones and skills levels and desired outcomes -- and those will be seeing investment to potentially become more advanced.
There will also be investment going into content. Today, most of the tutors, Bigai said, devise their own learning plans, although it has started to introduce more course materials to formalize what is learned and to set benchmarks for progress. These exist today in two languages, Spanish and English, which follows from the most popular languages on the platform (18% learn Spanish; 23% learn English). Other popular languages include French (10%), Arabic and Italian, and the plan, Bigai said, was to introduce more formal materials for these and other languages, too, over time.
On one level, Preply competes against the likes of Duolingo, Babbel, Memrise and other online education platforms geared helping people learning new languages; and on another level against the likes of GoStudent and any number of freelancer marketplaces (and word of mouth) for providing its learning by way of actual human tutors who connect with students over streamed video, typically one-to-one, lessons.
Preply up to now has been a lot looser than any of these, giving a lot of license both to tutors in terms of what they teach and even what they charge. However, with the company intent on going head to head with all of them in hopes of getting a bigger piece of the lucrative language learning market -- worth $47 billion by 2025 -- I suspect that introducing more formal parameters in terms of what is taught gives a hint that perhaps some of the other aspects will be getting more formalized, too.
"We’re thrilled to partner with Preply on their next phase of growth," said Ross Darwin, principal at Owl Ventures, in a statement. "We're particularly excited by the continued momentum of the consumer business as well as its new language learning offering for companies, increasingly reliant on international workforces.”