How Preply became one of the largest online language learning startups in the world

Kirill Bigai, the cofounder and CEO of Preply.

Preply

• Founded in 2012, Preply offers virtual live language tutoring for over 50 languages.
• The founders started Preply after they moved from Ukraine to the US.
• Preply recently raised $70 million in a Series C extension round led by Horizon Capital.

Over a decade ago, Preply CEO Kirill Bigai and his future cofounders Dmytro Voloshyn and Sergey Lukyanov moved from Ukraine to Boston for work. At the time, Bigai felt like his English proficiency wasn't where he wanted it to be. "On paper, I was intermediate, but I was struggling to connect with people for business, " he said.

To help with his English, Bigai found an online tutor who taught classes from Texas via Skype. The two hit it off and he could tell that his English skills were improving. He started to see the potential for online language tutoring as a viable business model, since online lessons were cheaper than in-person lessons and class schedules were more flexible.

In the summer of 2012, Bigai, Voloshyn and Lukyanov founded the online language learning startup Preply. In the decade since its founding, Preply has grown to 500 employees of 60 different nationalities, with over 35,000 online tutors, and offices in Barcelona, Boston, and Kyiv.

Last month, Preply raised a $70 million Series C extension round with a combination of debt and equity led by Horizon Capital. Reach Capital, Hoxton Ventures and Owl Ventures, which led its previous $50 million Series C in 2022, also participated.

Some of Preply's more prominent competitors include apps like Duolingo or other virtual tutoring companies like Cambly, which only offers English lessons. The global language learning market was estimated to be valued around $52 billion and growing in 2022.

Preply offers classes in 50 languages, and tutors are independent contractors who set their own rates and schedules. While consumer language learners use Preply, many of the startup's customers come from enterprise partnerships with over 200 companies, including Datadog and Bain.

But back when Preply was founded, the team found it hard to even recruit tutors to teach online classes, let alone attract investors, Bigai said. "We were contacting tutors who had never done online classes, and they were suspicious about it," he said.

Over the years, though, more investors became familiar with Preply's model. In 2015, the team took a meeting with a well-known investor in Berlin, who told the founders he had heard of the company because he was using it to learn Czech so he could speak to his wife in her native language, said Bigai.

Since then, Preply moved on from being bootstrapped. It first took venture funding in 2020, Bigai said. After this most recent $70 million Series C extension, Preply's total funding sits at around $170 million, according to PitchBook, and this latest infusion of cash will help develop more products that use generative AI, he said.

"We hadn't done a large language learning investment yet, which was surprising as an edtech fund," said Reach Capital partner James Kim, who handled Preply's Series C for Reach. "It's a category that's ripe for tech enablement."

The company's successful fundraising comes after a difficult year personally for the Preply team. The cofounders of Preply are all Ukrainian, and Preply had over 115 employees in Kyiv when Russia invaded Ukraine at the beginning of 2022. Bigai and his cofounders established a team effort, called "no Prepler left behind," that helped colleagues find accommodations for the first few months outside of Kyiv and get cash from their salaries up front.

All of Preply's Ukrainian employees are accounted for to date, and 100 have returned to Kyiv. "It was a big inspiration to see people working on the team, despite what had happened," Bigai said,

Moving forward, the biggest launch for Preply has been its AI tutoring assistant, which can generate new customized lesson plans and exercises. But Bigai is clear that it will not replace the need for human language teachers. "We believe in a world where efficient online language learning is human led and supported by AI," he said.

Read the original article on Business Insider

from Business Insider https://ift.tt/sVC6d0Y