Preply, a language-learning platform that connects people to tutors, has raised $70 million in new funding to bolster its use of artificial intelligence, the company revealed exclusively to CNBC.
The company, founded in Ukraine but based in the United States, said it raised funds by issuing new equity and debt. Preply’s founders include Ukrainian entrepreneurs Kirill Bigai, Dmytro Voloshyn and Serge Lukianov.
The equity segment was led by Horizon Capital, a venture capital firm focused on investing in emerging entrepreneurs, especially Ukrainian entrepreneurs. It’s also backed by Reach Capital, Hoxton Ventures, and others.
The funding builds on the $50 million Series C round Preply raised last year, bringing its total raised to more than $170 million.
Preply is a marketplace platform that connects people with real-life tutors to help them learn a new language. Each teacher on Preply shares a profile that students can view and set hourly lesson rates. Preply earns a discount from the tutor’s hourly rate.
Preply also sells to large corporations like Datadog, GroupM, and Bain that use Preply to improve their teams’ foreign language skills. The company is yet to turn a profit, despite a tenfold increase in revenue over the past three years.
Preply co-founder and CEO Kirill Bigai said the company will use the funding “to expand our leadership in[online language learning]with AI-powered human tutors, offering A fast game-changing learning experience.”
He added: “Although today’s team is truly global, as a company founded in Ukraine with significant R&D in Ukraine, this is a milestone worth celebrating. It echoes the sentiments of the Ukrainian tech industry and all Ukrainians. Resilience and determination.”
The fundraising comes at a time when funding conditions are tightening for startups struggling to raise capital as easily as they did in 2020 and 2021, the tech boom years sparked by Covid-19 lockdowns and monetary easing.
AI is a notable exception to this rule due to the popularity of OpenAI’s ChatGPT and similar tools. Many startups are raising huge sums of cash as venture capitalists try to find companies that can win from a surge in demand for artificial intelligence tools.
Preply says it already uses machine learning to better match learners with tutors. Now it’s incorporating more AI into its products, launching an AI assistant that helps tutors with exercises, grammar explanations and conversation starters.
Preply competitor Duolingo has been integrating OpenAI’s GPT language processing software to enhance the personalization of its apps to users. Shares of Duolingo have more than doubled so far this year. Other Preply competitors include Babbel and Busuu.
It also underscores continued interest from tech investors in Ukraine, which has been hit by Russia since Moscow invaded it early last year. Horizon Capital raises $125 million for startup fund aimed at supporting Ukrainian founders.
Several founders of the multibillion-dollar “unicorn” are from Ukraine, including Grammarly’s Max Lytvyn and Alex Shevchenko, and GitLab’s Dmitriy Zaporozhets. GoogleSamsung and amazon There are also R&D centers in the country.
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