Tencent turned its back to plans of leading a fundraising round for VIPKid, a Chinese education firm with an investment of $150, according to Reuters citing two people with knowledge of the matter, as online education platforms are now under more tighten oversight by the Beijing.
VIPKid, while dismissing the news calling it as untrue, said that it was in talks with Tencent and other investors for fundraising whereas Tencent did not respond to a Reuters request for comment.
Reuters quoting sources reported that the Chinese tech giant had verbally agreed with the VIPKid for investment that raised the hopes of VIPKid that it would be helping luring other investors to take part in fundraising, bringing the value of the company to $4.5 billion before going into the financing round.
But scrapping of the plans by Tencent after issuance of regulations last month by Chinese authorities around online education platforms, requiring teachers to hold valid professional qualifications and binding the firms to make public the information like certificates and work experience of the foreign teachers, said one of the sources.
Raising an amount of $500 million was the target initially set by VIPKid from fundraising that was cut to more than $150 million later on, said sources.
In an emailed statement to Reuters, VIPKid confirmed its close ties with Tencent as an investor, advisor and role model.
VIPKid describing the fundraising as a confidential matter did not provide any details but confirmed that Tencent is also among other investors with whom VIPKid is currently in talks for fundraising. The company added that any media reports dissimilar to that are not true and company is looking forward to correct the record.
VIPKid is a Beijing-based online education firm providing a platform for connecting children in China with the native English-speaking teachers in the United States and Canada through video lessons and have more than 70,000 teachers onboard.