VC-backed China Online Education files for US IPO
China Online Education Group, operator of VC-backed English-learning mobile app 51Talk, has filed for a US IPO.
The company has yet to indicate how many shares it plans to sell or at what price. The offering will provide a liquidity event for DCM Ventures, which holds a 24.1% stake in the business, as well as for Sequoia Capital and Shunwei Capital Partners, which own 19.3% and 15.3%, respectively.
Founded in 2011, China Online Education develops online and mobile education platforms that allow Chinese students to take one-on-one live interactive English lessons with overseas teachers. Its 51Talk mobile app is used to manage lesson bookings, pre-lesson preparation and review materials. The average price for a 25-minute lesson is about RMB30.00 ($5.00).
The company has previously raised four rounds of institutional funding, according to a filing. ZhenFund provided seed capital in June 2013, followed by a $2 million Series A from DCM and a $7.7 million Series B from DCM, Shunwei and Duowan Entertainment Group. In 2014, Sequoia joined the existing investors to provide $28.2 million in Series C funding. Last year, Huaxing Capital Partners led a $20 million Series D round. The existing investors also re-upped.
In January 2015, China Online Education acquired industry peer 91Waijiao.com, also backed by ZhenFund, in order to consolidate its market-leading position.
Revenue came to RMB154.7 million in 2015, up from RMB52.2 million the previous year. Meanwhile, the company's net loss widened to RMB327.5 million from RMB101.7 million in 2014.
Due to market volatility, only two VC-backed Chinese technology companies went public in the US last year, compared to eight in 2015. E-commerce site Wowo raised $40 million in last April, while Yirendai, an online peer-to-peer (P2P) online platform owned by CreditEase, completed a $75m million IPO in December.
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