- Preply secures $70 million to bolster the use of artificial intelligence in its online language learning platform.
- Funds will be used to extend leadership in online language learning and support AI-powered tutors, a trend believed to be a game-changer.
- Despite challenging fundraising conditions, AI continues to attract significant venture capital investments, following the success of tools like OpenAI's ChatGPT.
Preply, an established platform facilitating language learning through one-on-one tutor interactions, recently revealed to CNBC an impressive influx of $70 million in investment capital, with the primary goal to enhance their use of artificial intelligence (AI).
The brainchild of Ukrainian innovators Kirill Bigai, Dmytro Voloshyn, and Serge Lukianov, Preply is headquartered in the U.S. The recent capital raise was achieved through the issuance of new equity and debt.
The equity tranche was spearheaded by Horizon Capital, a venture capital establishment with a keen eye for promising entrepreneurs, especially those hailing from Ukraine. Other contributors included Reach Capital, Hoxton Ventures, among others. This latest injection of funds follows a successful $50 million Series C funding round last year, thereby raising Preply's total capital to a staggering $170 million.
Offering a marketplace for individuals keen on learning new languages, Preply bridges the gap between learners and human tutors. Tutors on the platform present their profiles and set their fees per hour, from which Preply takes a commission. Several significant corporations like Datadog, GroupM, and Bain leverage Preply's offerings to polish their teams' foreign language capabilities. Despite a tenfold growth in revenue over the past three years, the company has yet to achieve profitability.
According to Kirill Bigai, CEO and Co-founder of Preply, the newfound wealth will be channeled towards "extending our leadership in the online language learning category through AI-powered human tutors," a strategy that he believes is a game-changer. "As a Ukrainian-founded company with significant R&D in Ukraine, this achievement is a testament to the resilience and grit of the Ukrainian tech industry," Bigai further commented.
Despite the challenging fundraising environment for startups in recent times, AI-based firms have become the exception to the rule. OpenAI's ChatGPT and similar tools have been making waves, enticing startups to secure substantial investments. Preply is no stranger to machine learning and AI, using these technologies to optimize learner-tutor matches, and has now introduced an AI assistant to help tutors develop exercises and explain grammar. This drive towards AI incorporation mirrors actions taken by Preply's competitors, such as Duolingo, who are also leveraging AI to personalize their services.
WOM Money Picks
Be a part of the winning team | 81% Success Rate.