Tencent, Sequoia lead US$80 million funding for VipKid’s new education brand Dami Wangxiao

A sub-brand of Chinese online education platform VipKid has secured US$80 million in fundraising led by Sequoia Capital and internet giant Tencent Holdings, indicating that tech-enabled education remains a hot investment sector in the country.

Dami Wangxiao, which translates into Rice eSchool, aims to offer live-streamed English and maths courses to primary students in China, the company announced on Monday as it revealed completion of the series A funding round.

Having started as an incubated project nearly two year ago, the brand is designed to provide more cost-effective education by enabling bigger class sizes, with students signing up for online sessions in addition to private instruction.

Founded in 2013, VipKid is one of the country’s largest online education platforms and has signed up over 700,000 students. The company started off with online one-on-one English instruction, matching Chinese learners with US- and Canada-based teachers.

Known for its often aggressive parenting style and crop of tiger moms, China has taken a lead in online education, using some of the latest technologies such as artificial intelligence and virtual reality to improve education quality and efficiency. The country’s online education market is expected to reach 380.7 billion yuan (US$54.7 billion) this year, from 251.7 billion yuan in 2018, according to consultancy firm iResearch.

Still, the boom has attracted increasing competition from some of the country’s biggest tech companies including ByteDance, whose Gogokid platform brings English-speaking teachers into virtual classrooms in China.