Language learning platform Preply made a name for itself for connecting students with a selection of some 35,000 tutors and group classes across some 50 languages. Now it’s looking to the future — an AI future. The company today announced that it has raised a further $70 million in funding — a combination of debt and equity — to extend its Series C to $120 million.
Horizon Capital is leading this round, with edtech specialist Reach Capital, Hoxton Ventures and other existing investors also participating, such as Owl Ventures, which led the company’s initial Series C raise, totalling $50 million, in 2022.
We have asked the company what portion of this latest $70 million is debt, and what is equity. The company’s last round was at a $432 million valuation, and we’ve also asked if that figure has changed. We’ll update as we learn more.
The funding will have a specific purpose: the company that made its name out of its network of human tutors, and differentiated itself from the likes of Duolingo’s approach that involves language learning with no live tutors at all, is planning to use the funding to double down on AI, specifically to “scale” the experience.
“While human-led learning will always be at Preply’s core, the company is using AI as an engine to scale learning, improve access and focus on teaching like never before,” the company said in an announcement. “This is a natural extension of Preply’s DNA in machine learning that it has always used to pair tutors and learners.”
The company was originally founded in Ukraine and has been seen as a leading example of the tech prowess coming out of that country, even as it continues to grapple with a painful, destructive war with Russia. The last few years, including those that have been war-torn, has seen a big boom in its business, with sales growing tenfold in the last three years, with a boost in its B2B business with 200 new contracts in the last 12 months. Datadog, GroupM and Bain are among its customers.
Preply has been incorporating various AI elements into its platform for a while now, and this funding will be used to supercharge that. Given the advances we’ve seen with generative AI, and the fact that other language learning platforms like Duolingo are also looking to do more with AI, you might see this as both a defence move and an offensive tactic.
The company offers already an AI teaching assistant “to enable tutors to create a variety of exercises, grammar explanations, conversation starters and more.” This is not so much for live tuition as to help with all of the planning and after-lesson-support. It’s also been building AI analytics to help understand how students are doing.
But bringing in more AI now is clearly what the market is demanding, especially right now, at a time when funding has been very tight across so many other areas of the tech sector.
“It’s a great achievement to have secured this capital injection while we still have plenty of runway and the majority of the previous raise in the bank; a result of rigorous capital efficiency and a laser focus on performance,” said Kirill Bigai, co-founder and CEO of Preply, in a statement. “The additional funds will enable us to extend our leadership in the category through AI-powered human tutors, providing a learning experience that is quickly becoming a game changer. Though the team today is truly global, as a Ukrainian-founded company with significant R&D in Ukraine, this is a milestone to be celebrated. One that echoes the resilience and determination of the Ukrainian tech sector and all Ukrainians.”
“We are excited to partner with Preply’s visionary co-founders and their exceptional management team,” said Dmytro Boroday, a partner at Horizon Capital, in a statement. “Preply is one of the fastest-growing global edtech brands, now leading the live language learning category. With a culture of operational excellence and superb performance over the past few years, we are proud to support them as they enter the next stage of growth.”
“Preply is the clear leader in live language learning, a sector where we have both appetite and deep experience,” added James Kim, a partner at Reach Capital. “We’re thrilled to partner with them as they continue to expand and grow. AI has enormous potential to improve the effectiveness of tutors and the experience of learners, and Preply is on the leading edge of incorporating AI into the learning journey.”