China’s Liulishuo Information Technology Co., the company behind one of the most popular English-teaching apps Liulishuo in China, is targeting an initial public offering in the U.S by the fourth quarter of 2018. This AI + education startup is looking to raise as much as $300 million, at a valuation of about $2 billion, according to people familiar with the matter.
The company’s last fundraising was an approximately $100m Series C funding round from a year ago led by China Media Capital and Wu Capital. Other backers include IDG Capital, GGV Capital, Cherubic Ventures and also Trustbridge Partners, etc.
Its flagship app, which seeks to redefine the English language learning via technology and gamification, used a unique voice assessment technology which was built jointly by Yi Wang and Hui Lin, both co-founders of the company.
By technology, it means using artificial technology-based speech recognition and evaluation engine powered by data to help Chinese learners improve their speaking English. As of 2016, the company has amassed to more than 5 million hours of speech database of Chinese speakers.
The app offers different categories and topics, where each ‘course’ offers a series of short dialogues that are chained together into a series of games, where a completion of one level unlocks the next, turning English learning into a game playing experience.
Its popularity grew quickly, reaching 30 million registered users by 2016, only to increase further to more than 45 million to-date, according to its website data.
The app runs on a freemium model that offers basic lessons for free. Users only pay for the more advanced services. The company even managed to sign up corporate customers who want to train their executives’ English. An average user is said to spend around $150 per year and the company has more than 600,000 paying users as of July 2017, according to an article by our parent 36Kr.
However, the burgeoning Chinese online education industry that’s set to exceed the RMB300 billion mark in 2018, according to the China Online Education Industry White Paper issued last year, might fuel more competitors going forward.
The big financing deals of China’s VIPKid and iTutor Group are just some examples of how the online education industry has attracted the growing interest among investors.
Wang, the founder & CEO of LingoChamp, on the other hand, is very prepared for such a battle, having once talked about his take on adopting the Amazon model of technology, products, and data to maintain a competitive advantage over 99 per cent of its competitors who operate very similarly to the Wal-Mart model.
Liulishuo’s IPO move came in the wake of an IPO wave both in the U.S & Hong Kong among Chinese educational startups. According to the Securities Daily, in 2018 alone, the public markets have already welcomed 18 educational startups.
Some of the Chinese education tech firms that just got listed in the U.S include Beijing-headquartered Park New Education and Sunlands Online Education Group. KrASIA has also earlier reported of two Chinese education tech companies who have recently filed with the Hong Kong bourse. They are Hujiang and Koolearn.com.
Editor: Ben Jiang