China-focused online English teaching platform raises $14m

The new capital will be used to improve product quality and service efficiency, according to a statement. “We will not burn money to reach scalability, we will not hire any spokesperson for advertising purposes. Growth will be driven by referrals from existing users,” says Hao Wu, CEO of Whales English.

The company was founded in 2012 by a group of parents who wanted higher quality English tuition for their own children. They brought in US textbooks and hired experienced teachers from US schools to run online classes.

Whales English teaches children from three to 18 years old in a small-class model. In 2019, revenue increased fivefold and the company generated a net operating cash inflow.

Customer acquisition costs are approximately RMB2,000 per capita, which is about one-fifth of the industry average, the company said. Renewal rates are 80-85% and 60-70% of new students sign up as a result of referrals by existing customers. 

Chuan Lin, a vice general manager at Sino Ocean Capital, said that Whales English represents the firm's first investment in online education. “Some players in the sector failed because they didn’t grasp the essence of education. They ignored product effect and efficiency while blindly expanding scale. Whale English has put more resources into polishing its product and it has gained recognition of customers,” said Lin.

One of the best known - and best-funded - players in the space is VIPKid, which offers one-to-one English courses by connecting some 70,000 English native speakers in the US with 600,000 students in China. Last October, it completed a $150 million Series E round led by Tencent Holdings.

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• Topics
• Greater China
• Early-stage
• Consumer
• China
• Education
• Sino-Ocean Capital