Preply, a language learning platform that connects people with tutors, has raised $70 million in new capital to enhance its use of artificial intelligence, according to an exclusive report from CNBC. The company, originally founded in Ukraine but now based in the U.S., obtained the funds through a combination of equity and debt issuance. The co-founders of Preply include Ukrainian entrepreneurs Kirill Bigai, Dmytro Voloshyn, and Serge Lukianov.
The equity portion of the funding round was led by Horizon Capital, a venture capital firm specializing in investing in emerging entrepreneurs, particularly from Ukraine. Other participants in the funding round include Reach Capital and Hoxton Ventures, among others. This new investment builds upon the $50 million Series C funding Preply secured last year, bringing the company’s total funding to over $170 million.
Preply operates as a marketplace platform, connecting individuals with human tutors to facilitate language learning. Each tutor has a profile that potential learners can review, and tutors set their own hourly rates for lessons. Preply earns a portion of the fees charged by tutors. The platform also serves large enterprises like Datadog, GroupM, and Bain, assisting in enhancing their teams’ foreign language skills. While not yet profitable, Preply has experienced significant revenue growth, increasing tenfold over the past three years.
Kirill Bigai, CEO and co-founder of Preply, stated that the company intends to leverage the newly secured funds to solidify its leadership position in the online language learning market through AI-powered human tutors, which are poised to become a game changer in the industry. Bigai also emphasized the milestone achievement, noting Preply’s Ukrainian roots and its contribution to the resilience and determination exhibited by the Ukrainian tech sector.
The funding injection comes at a time when startups face more challenging fundraising conditions, with raising capital proving to be less straightforward compared to the boom years of 2020 and 2021, driven by the effects of the COVID-19 pandemic and monetary easing. However, AI remains a notable exception, with increasing demand for AI tools leading to significant investments in related startups. Preply already utilizes machine learning to improve tutor-learner matching and is now expanding its incorporation of AI technology. The company has recently introduced an AI assistant to help tutors create exercises, provide grammar explanations, and initiate conversations.
Duolingo, one of Preply’s competitors, has also incorporated OpenAI’s GPT language processing software to enhance app personalization for users. As a result, Duolingo’s shares have more than doubled in value this year. Other competitors include Babbel and Busuu. The ongoing interest from tech investors in Ukraine is noteworthy, considering the geopolitical challenges in the region. Horizon Capital, for example, raised $125 million for a startup fund specifically dedicated to supporting Ukrainian founders. Ukraine has produced several successful tech entrepreneurs, such as Max Lytvyn and Alex Shevchenko from Grammarly, as well as Dmitriy Zaporozhets from GitLab. Additionally, major companies like Google, Samsung, and Amazon have established research and development centers in Ukraine.
In conclusion, Preply’s latest funding round, totaling $70 million, will empower the company to further leverage artificial intelligence in its language learning platform. With its marketplace model, Preply connects learners with human tutors and provides language learning services to both individuals and large enterprises. The injection of funds from prominent venture capital firms demonstrates continued investor interest in the Ukrainian tech sector. With its innovative approach and commitment to AI integration, Preply is well-positioned to maintain its leadership in the online language learning market and drive significant impact in the industry.
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