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Preply, a language learning platform that connects people with teachers, has raised $70 million in new capital to ramp up its use of artificial intelligence, the company told CNBC EXCLUSIVELY.
The company, which was incorporated in Ukraine but is based in the United States, said it raised the money by issuing new equity and debt. Among the founders of Preply are Ukrainian entrepreneurs Kirill Begay, Dmytro Voloshin and Serge Lukyanov.
Horizon Capital, a venture capital firm, led the equity stake focused on investing in emerging entrepreneurs, primarily Ukrainians. It has also been backed by Reach Capital, Hoxton Ventures, and others.
The funding adds to the $50 million Series C funding round it raised last year, bringing its total funding to more than $170 million.
Preply is a marketplace platform that connects people with human teachers to help them learn new languages. Each teacher on Preply shares a profile that students can view, and sets an hourly rate for lessons. Preply takes a cut from the teacher’s hourly rates.
Preply also sells to large organizations like Datadog, GroupM, and Bain, which use it to improve the skills of their foreign language teams. The company is not yet profitable, despite revenue growth tenfold in the past three years.
The company will use the funds to “extend our leadership in the (online language learning) category with AI-powered human tutors, Kirill Begay, co-founder and CEO of Preply, said, providing an educational experience that is quickly becoming a game-changer.”
“Although today the team is truly global, as a company founded in Ukraine and of great importance in the field of research and development in Ukraine, this is a milestone that should be celebrated. It reflects the resilience and determination of the Ukrainian technology sector and all Ukrainians,” he added.
The funding comes at a time when fundraising conditions are tightening for start-ups, which are struggling to raise money quite as easily as they did in the tech boom years of 2020 and 2021 brought on by Covid-19 lockdowns and monetary easing.
AI has been a notable exception to this rule, thanks to the popularity of OpenAI’s ChatGPT and tools like it. Many startups are raising seismic cash as venture capitalists try to find companies that will win from the high demand for AI tools.
Preply said it already uses machine learning to better match learners and educators. Now, it’s incorporating more AI into its offerings, having launched an AI assistant to help teachers devise exercises, grammar explanations, and conversation starters.
It comes as Preply competitor Duolingo is integrating OpenAI’s GPT language processing software to further personalize its app for users. Duolingo’s share price has more than doubled so far this year. Other competitors to Ripley’s include Babel and Busuu.
It also highlights the continued interest by tech investors in Ukraine, which has been battered by Russia since Moscow launched its invasion of the country early last year. Horizon Capital has raised $125 million for a startup fund aimed at supporting Ukrainian founders.
Many of the founders of the multi-billion dollar “unicorns” hail from Ukraine, including Grammarly’s Max Lytvyn and GitLab’s Alex Shevchenko and Dmitriy Zaporozhets. Googleand Samsung and Amazon It also has research and development centers in the country.
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