Details of the deal

The round was led by Owl Ventures, with participation from previous investors, in particular, Diligent Capital, Hoxton Ventures, Educapital, Evli Growth Partners, as well as co-founder of Grupa Pracuj Przemysław Gacek. The new VC investment companies Swisscom Ventures and Orbit Capital also joined.

The funds raised will be used to expand the company’s operations in the US and Europe, further develop the AI-based tutor searching technology, and increase the global community of foreign language learners.

The platform plans to capture the growing online language learning market, which will reach $47 billion by 2025.

In March 2021, Preply raised $35 million in Series B funding.

About Preply

Preply is a Ukrainian company that develops a global language learning marketplace. The company was founded by Kirill Bigai, Dmytro Voloshyn, and Serhii Lukyanov. Using a machine learning algorithm, recommended teachers create personalized lesson plans based on a student’s budget, schedule, and current knowledge. As stated by the founders, Preply unites the world’s biggest foreign language learners community.

• Today Preply is global edTech-platform that brings together more than 32,000 tutors who teach 50 languages to hundreds of thousands of students from 180 countries. Over 250 people work in two offices based in Kyiv and Barcelona.
• Last year, Preply tripled its B2B operations. Among its clients are such companies as Bytedance (TikTok), Mercedes, and McKinsey.
• In the past two years, the number of Preply users has quadrupled. The general amount of students who study with the marketplace is bigger than Ivy League.
• Preply has offices in three countries — Ukraine, the US, and Spain, and its founders are from Kyiv.
• Despite the war in Ukraine, Preply managed to grow its team to 400 employees of 58 nationalities in 30 countries.
• Over the past few months, the company’s international staff has launched a number of significant initiatives to support Ukraine. Among them are the Message for Ukraine campaign, which translates more than 8,000 messages of support from around the world into Ukrainian, as well as a free language assistance program for thousands of Ukrainians crossing borders and starting to learn a new language.

• Preply is No. 59 in the general list and No. 5 among educational projects.

• Instacart, an American company that operates a grocery delivery and pick-up service, tops the list.
• The rankings were prepared by a16z, one of the most famous venture capital funds in the world.
• The list is based on three metrics: an estimate of the total turnover of goods and services, Apptopia data for app performance, and SimilarWeb data for website traffic.
• Preply raised a $35 million Series B round last year. The startup used the funds to expand the company’s staff across all locations where it operates.
• Preply has more than 40,000 tutors who teach 50 languages to hundreds of thousands of students across 180 countries.

All exits were profitable, with returns up to x25. After the successful exits, Digital Future restarted its startup search and evaluation and is ready for new investments into promising projects.

“I see here an important signal to the Ukrainian ecosystem. Usually, you have a rare chance to exit an investment with profit. You can wait for a positive exit for 13 years on average. I want to make an example from our fond to show Ukrainian startups and the whole community that they can make money here. Moreover, such exits make our country more attractive to foreign investors,” noticed Oleksii Vitchenko, the founder of Digital Future.

• The share at Preply was sold to its new investors. After the investment in 2016, Preply became the tutorial giant that increased its volume from tens of thousands of hours a month to tens of thousands of hours a day. Preply successfully closed the $35 million Series B round in 2021 and multiplied its income during the pandemic.
• Attendify became a respected solution for developing mobile apps for large events with big clients like Google, PepsiCo, and Harvard University. The pandemic influenced Attendify to adapt to the online event industry. In 2021, Attendify was acquired by Hopin, one of the online event market leaders and one of the fastest-growing companies ever.
• SOC Prime built the world’s largest cyber threat detection marketplace where the experts give their “prescriptions” to detect threats automatically, and clients get updates for their systems. The startup describes its Detection-as-Code marketplace as “Spotify for cyber threats.” In October 2021, SOC Prime secured $11 million from Streamlined Ventures and Rembrandt Venture Partners.
• Digital Future partially exited Rallyware; their partnership increasingly grows in the enterprise digital transformation. Rallyware is a performance enablement platform that analyzes real-time performance data of all employees and discovers their skill gaps. Based on the data, Rallyware automatically develops personal training and practical programs for every single employee. It results in a 32% increase in their performance on average. Among its clients are Samsung, Avon, Tupperware, Vonage, NuSkin, and many others. In October 2021, Rallyware raised $22 million from PeakSpan Capital.

About Digital Future

Digital Future is a Ukrainian venture capital firm that invests in seed and early-stage companies. The main criteria for investments are a scalable business model in the US and EU markets, a team, and global ambitions. The firm was launched in 2014, and so far, it has over 30 companies and seven exits in its portfolio, with average deal amounts ranging from $50,000 to $350,000.

• The investments: BeLive, Let’s Enhance, Petcube, PromoRepublic, Reply.io, Salo, Serpstat, SignaLayer, Softcube, SplitMetrics, YouAppi, YouTeam. 
• The exits: Mobify (Jeapie), Friendlydata, Coureon, Preply, Attendify, SOC Prime, and Rallyware.

Who invested in Preply?

Owl Ventures and Full In Partners co-led the round with participation from previous investors Point Nine Capital, Hoxton Ventures, EduCapital, All Iron, Diligent Capital, and Evli Growth Partners.

Also, angel investors including Niklas Ostberg, co-founder & CEO of Delivery Hero; Arthur Kosten, co-founder of Booking.com; David Helgason, co-founder of Unity Technologies; and Przemyslaw Gacek, co-founder of Grupa Pracuj, also participated in the current round.

How the funds will be used?

According to Preply CEO Kirill Bigai, the funds raised will be used to expand the company’s staff across all locations where it operates. Preply was founded in 2013, and this round collectively exceeds all the investments the company has raised since its inception.

Due to the popularity of online learning during the pandemic, as well as the AI technology used in teaching, the company has increased the number of active students and tutors recently. The number of lessons per student has increased by 16 percent.

Among 68 percent of Ukrainians on the platform, the most popular language is English. Also popular are German, Spanish, French, and Polish. Almost 35 percent of the total number of hours of Ukrainian language study on the platform is in the United States, followed by the United Kingdom and Ukraine.

Now Preply is an online platform that brings together more than 40,000 tutors who teach 50 languages to hundreds of thousands of students from 180 countries. Over 250 people work in two offices based in Kyiv and Barcelona.

The team has analyzed 1,500 startups and identified the most effective ones. The study covered a wide range of categories, from stock trading to games. If a startup has raised more than €100 million or has been acquired, Idinvest considers them as giants.

Education

The Education category includes Ukrainian startup Preply, an edtech startup, which has built an online marketplace for finding and booking private tutors for learning foreign languages. In 2020, Preply closed the $10 million round, and the total amount of funds raised exceeded $15 million. The main markets for the startup are the USA and Western Europe.

Wellness and Beauty

The team has identified and ranked BetterMe’s family of Health&Fitness apps as “top startups.” Only in November 2019, the app made over $2 million that made it the sixth-largest App Store revenue in the Health & Fitness category. In 2020, the BetterMe team consists of 100 people.

Finance

Entertainment

Mobility

Travel

You raised your previous $4 million round in 2018. How has the service changed since then? Tell us what has changed, improved.

After the last round, the company’s revenue increased by more than five times. The number of students and tutors on the platform is growing at a similar pace. Preply has strengthened in the main markets of North America and Western Europe.

We also greatly improved the quality of the product at all its stages and launched such important parts of the user experience as a video-chat platform for lessons and a mobile application.

In 2019, we opened a new office in Barcelona, where we are actively recruiting employees. The team has grown, and today Preply has a team of more than 30 nationalities from all over the world.

What are Preply’s key metrics now?

We continue to look at the company’s key financial metrics (turnover, income, expenses, marginality), platform usage (number of active students, tutors, hours of tutoring on the platform), engagement (number of lessons per student or tutor per week). And, of course, we take into account unit economics metrics: cost of attracting a student or tutor, total income per student or tutor.

What markets are major for Preply now? Where do you make the most money?

The U.S. and Western Europe are the major markets, but we are also active in Asian and Latin American markets.

How big is your team?

We have a multicultural product that brings together tutors and students from around the world. The same goes for the team – currently, Preply employs 125 people in Kyiv and Barcelona. The team of top management is unchanged: I am as CEO of the company, CTO Dmytro Voloshyn, and Head of Design Sergey Lukyanov.

How are you going to use the funds raised?

We will use $10 million to achieve several objectives. Firstly, to develop a mobile application on Android and iOS. It will allow students to find teachers more quickly, communicate effectively, and consequently – to learn.

Secondly, in terms of product development, Preply is moving from an exclusively market model to a multifunctional platform with a curriculum, homework checking, and productivity assessment tools. Additional funding will strengthen these functions. Our tutors and students will get the most out of interactive online lessons.

A part of the funding will also be used to open a new office and hire staff.

You have two offices in Kyiv and Barcelona. Do you plan to expand to new locations?

Yes, we plan to open an office in the United States by the end of 2020. Our goal is to expand our presence in the online education market, mainly in North America, France, Germany, Spain, Italy, and the UK. At the same time, we will be expanding into Central Asia and Africa. In this region, we rely on a mobile application.

With the advent of the crisis, everyone is talking about education, courses, etc. How did it affect Preply’s metrics? Is the influx of new users large, or is it a myth and everyone is just watching Netflix?

Due to this situation, hundreds of new tutors and students have joined our platform. In some regions, the website traffic has tripled compared to the statistics of January 2020. The flow of requests for online training continues to grow. We are working with tutors whose language schools have temporarily closed due to quarantine. Professionals who previously preferred the remote job also contact us.

Currently, the main incentive for professionals is to keep regular employment, not to lose income, and to motivate the audience to learn. And Preply’s strategy is to develop and grow with clients under any circumstances.

London-based venture capital firm Hoxton Ventures was the lead investor. Point Nine Capital, All Iron Ventures, The Family, EduCapital, and Diligent Capital also participated in the round along with angel investors: Arthur Kosten from Booking.com; Gary Swart, ex-CEO of Upwork; David Helgason, founder of Unity Technologies; and Danielle Hoffer, founder of Couchsurfing.

The company’s valuation is not disclosed. The total amount of funds raised exceeds $15 million.

According to the founder of the startup Kirill Bigai, the coronavirus should not become a problem for the development of the startup, even on the contrary: a large number of people left home, they will spend their free time to improve on their language skills.

Where will the funds go?

The funding will help the company strengthen its position in North America, France, Germany, Spain, Italy, and the UK. Besides, Preply will open a branch in the United States, a strategically important region for the project. Currently, Preply has offices in Kyiv and Barcelona.

“The European market is multicultural and quite developed. A lot of people speak fluently or learn two or three foreign languages. We bring our experience in Europe to the U.S. We offer Americans a variety of learning opportunities thanks to our qualified tutors from Europe, Latin America, and Asia,” Bigai says.

Preply also expands the platform. Preply focuses on the learning of foreign languages. But the company actively attracts math, chemistry, and creative writing tutors.

The startup plans to launch new tools for its tutors. They will help to track learners’ progress with new assessments and homework. The company plans to develop a mobile application for Android and iOS.

To recap, the startup closed its previous round in 2017. Back then, the lead investor was the German venture capital firm Point Nine Capital. Artur Kosten (Booking.com, 2003-2012), Mariusz Gralewski (DocPlanner, Poland), Przemysław Gacek (Grupa Pracuj, Poland), as well as companies RTAVentures VC (Poland), Diligent Capital Partners (Ukraine), and SMRK (Ukraine) also have invested in the startup.