
Deal focus: Liulishuo bridges the learning gap
China's Liulishuo wins $100 million in funding for an adult-focused education app that uses artificial intelligence to bring customized teaching solutions to English language learners
The emphasis placed on written tests and the paucity of native English-speaking teachers in China’s traditional educational establishments means that many students emerge without a strong grasp of the language.
Yi Wang wants to help them with their pronunciation. In 2013, the ex-Google employee launched Liulishuo, an app that uses voice recognition and artificial intelligence (AI) technologies to compare sentences spoken by native speakers and the Chinese learners. Based on the results, it gives scores and learning tips.
“In the early days, the technology wasn’t as smart as it is now, but the company has always been working on that vision. When AI and machine learning started to become more mature and reliable between 2014 and 2015, the company began adopting those technologies very quickly,” says Matt Cheng, managing partner at Cherubic Ventures, a seed investor in Liulishuo alongside GGV Capital and IDG Capital.
The same investors returned for a Series A in 2014 which was joined by Hearst Ventures. A year later, the start-up raised a $42 million Series B at a valuation of $200 million, led by TrustBridge Partners. Last week, it received about $100 million in Series C funding led by CMC Capital Partners – the GP’s first investment in this field – and Beijing-based family office Wu Capital. All the existing investors re-upped.
While most education platforms focus on K-12 education, Liulishuo targets adults, which Cheng sees as an untapped market. The company’s teaching methodology also differs from other operators, which tend to base lessons on either hard-to-digest academic courses or fragments from English language movies and songs. There is no systematic approach to helping people improve.
Liulishuo creates interactive courses using online games and social activities based on standard teaching curriculums. With 45 million registered users, it also has a large collection of samples of Chinese people speaking English with common errors. This resource underpinned last year’s launch of Dong Ni Ying Yu, which provides personalized study plans. The AI-powered in-app function evaluates and adapts to an individual student’s capabilities. Priced at RMB99 ($15) per month, it has already attracted 600,000 paid users. Liulishuo turned profitable in February.
“Many investors are interested in the company and ask it to go after the K-12 market, but I think in the mid-term, the adult market is limitless – there are no competitors, and adults are willing to pay,” Cheng says. “Secondly, as a software service provider, Liulishuo can empower other traditional peers by using its AI technology, just like Google. It doesn’t need to go offline.”
Indeed, in line with the new funding, Liulishuo announced a partnership with US-listed Chinese K-12 after-school tutoring services provider TAL Group, under which the company’s English speech assessment technology will be integrated into TAL’s English learning products.
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