Preply Raises $35M Series B to Fuel Language Learning Growth

Preply Secures $35 Million in Series B Funding

Preply, an online marketplace dedicated to language tutoring, has successfully obtained $35 million in Series B funding. This investment round was jointly led by Full In Partners and Owl Ventures, a prominent edtech investment firm with previous backing of companies like Byju’s and Newsela. This funding arrives approximately one year following the company’s $10 million Series A raise.

The investment in Preply reflects both the company’s recent expansion and the increasing global demand for language learning resources.

Significant Growth in Users and Tutors

At the time of its Series A closure, Preply had facilitated 2 million booked lessons with a network of 10,000 verified tutors. Currently, the platform has surpassed 10 million lessons booked, and its tutor base has expanded to 40,000 individuals spanning 190 countries. Plans for expansion into the United States were considered in 2020, and the country now represents the company’s largest market, contributing one-third of its total revenue.

This growth demonstrates Preply’s ability to gain market share despite competition from established players like Duolingo, which is planning an IPO, and Babbel, which reported over $150 million in revenue in 2019.

Differentiating Through AI-Powered Matching

According to CEO Kirill Bigai, Preply distinguishes itself through its proprietary technology, leveraging artificial intelligence to connect students with the most suitable tutors. The platform considers over 400 different parameters to facilitate optimal matches within its marketplace.

For instance, Preply can pair a student located in San Francisco who prefers evening study sessions with a tutor in a compatible time zone. Furthermore, the system can identify tutors who share similar backgrounds with students, offering bilingual support to aid in language transitions.

A Focus on Live, Native-Speaker Instruction

A core philosophical difference sets Preply apart from its competitors. While companies like Duolingo emphasize gamification and self-directed learning, Preply champions live instruction with native speakers as the most effective approach.

“Our customers believe that our method of language acquisition is considerably more effective than language learning applications,” Bigai stated. Preply currently supports 50 languages, ranging from widely studied options like Spanish, English, and French to less common languages such as Icelandic, Tibetan, and Catalan.

Expansion into the Enterprise Sector

The pandemic has spurred growth for various language learning applications, even within a historically less active edtech segment. Companies like Fluent Forever have secured funding, and Fluent City has launched a subscription-based service.

Bigai identifies a substantial opportunity for Preply within the enterprise market. Beginning in 2019, the company began offering solutions to globally distributed businesses to assist employees in learning the languages of their colleagues and clients. Preply anticipates having “hundreds and hundreds” of enterprise clients this year.

Revenue Model and Tutor Retention

Preply generates revenue through a revenue-sharing arrangement with its tutors, retaining 20% of each lesson fee, which typically ranges from $15 to $20 per hour. The company also collects the full fee for the initial lesson, functioning as a lead generation cost. For enterprise clients, the same business model applies, but employee learning hours are capped, with the employer covering the associated costs.

While the company did not disclose specific teacher retention rates, which are crucial for student progress and consistency, Bigai noted that 30% of its top-performing tutors remain on the platform for multiple years.

Preply indicated that profitability is achievable but is currently prioritizing growth in its B2B offerings and overall business development.