Jack Ma returns to school

Alibaba committed nearly a half online English tuition provider TutorGroup's $100 million Series B round of funding. The rest came from Temasek Holdings and existing backer Qiming Venture Partners.

Through this investment Alibaba has stolen a march on its domestic internet rivals, Tencent Holdings and Baidu, into the education sector. Eric Yang, co-founder and CEO of TutorGroup, notes that the partnership is regarded as strategic and there have already been discussions on potential collaboration.

"Alibaba has a breadth of products, while TutorGroup has more than a decade of domain know-how in online education. This may present both parties with unique opportunities," he adds. "Our executive team is multinational, has been educated in different countries, and understands the nuances of some of the largest education systems work."

While Alibaba and Qiming will support the company's expansion in China, Temasek is expected to help scale the business in Southeast Asia and Japan. The firm is also looking to beyond English tuition, having recently launched Tutor Ming, aimed at foreign students learning Mandarin Chinese.

Brothers Eric Yang and Ming Yang started the company in Taiwan 10 years ago, initially providing English tutorials in classrooms in competition with Wall Street English and EF Education First. The firm soon launched an online platform with a view to entering the mainland market.

"I knew this company from classifieds in a Chinese newspaper and then made a cold-call to its founders," says J.P. Gan, managing partner at Qiming. "The company had already recorded a profit in Taiwan at that time."

Qiming first invested in TutorGroup in April 2012, committing $15 million. CyberAgent Ventures invested a few months later. Qiming has advised the company on sales and marketing, and last month recruited Yao Ming, the former NBA basketball player, as the face of the brand.

Within two years of the initial investment, Wall Street English pulled out of Taiwan, solidifying TutorGroup's position. At the same time, it was seeing rapid expansion in the mainland.

The company offers tuition services to adults through its TutorABC and VIPABC platforms, as well as a separate service for school-age students. It expects the adult English language-learning market will grow at 25% per year through 2016, when it will be worth more than $21 billion.

Supported by an R&D team in Silicon Valley, TutorGroup provides real-time language learning through online class sessions in 40 countries with 2,000 tutors to date.

"People may think that online teaching is easy to run through Facetime or Skype, but it's not," says Gan. "Successful service providers should have a full-set of teaching content, IT system and teaching experience."

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• Topics
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• Greater China
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• Alibaba Group
• Temasek Holdings
• Qiming Venture Partners
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