Preply, a language learning platform with Ukrainian roots, has secured $70 million in new funding to bolster its artificial intelligence (AI) capabilities. The funding round was led by Horizon Capital, a venture capital firm with a focus on Ukrainian startups, along with Reach Capital and Hoxton Ventures.
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Key takeaways
- The company, which connects learners with human tutors, plans to use the funding to accelerate its AI expansion.
- This comes as part of a broader trend in the tech industry, with investors eagerly backing AI-focused companies at high valuations.
Preply, which was founded in Ukraine but is now headquartered in the U.S., raised the funds through a combination of equity and debt. The company’s founders, Kirill Bigai, Dmytro Voloshyn, and Serge Lukianov, are all Ukrainian entrepreneurs.
The latest funding round follows a $50 million Series C round last year, bringing the total amount raised by Preply to over $170 million. The platform operates by connecting learners with tutors who set their own hourly rates, with Preply taking a percentage of these fees.
In addition to individual learners, Preply also caters to large corporations like Datadog, GroupM, and Bain, helping their teams improve their foreign language skills. Despite seeing a tenfold increase in revenues over the past three years, the company is not yet profitable.
Preply’s CEO, Kirill Bigai, stated that the new funding will be used to enhance their position in the online language learning market through AI-powered human tutors. He also highlighted the company’s Ukrainian roots and the resilience of the Ukrainian tech sector.
The funding round comes amidst a challenging fundraising environment for startups, which have found it harder to secure funding compared to the boom years of 2020 and 2021. However, AI-focused startups have been an exception to this trend, with many raising significant funds as investors seek to capitalize on the growing demand for AI tools.
Preply already uses machine learning to improve the matching process between learners and tutors, which has led some to ask, “Is Preply good for my learning needs?”. The company has recently launched an AI assistant to help tutors create exercises, explain grammar, and initiate conversations.
AI Heat in Language Learning
This development comes as Preply’s competitor, Duolingo, has also been integrating AI into its platform, using OpenAI’s GPT language processing software to personalize its app for users. Duolingo’s shares have more than doubled this year. Other competitors in the space include Babbel and Busuu.
The funding round also underscores the continued interest of tech investors in Ukraine, despite the ongoing conflict with Russia. Horizon Capital recently raised $125 million for a startup fund dedicated to supporting Ukrainian founders.
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