VIPKID Announces Positive Unit Economics for 2020

Consumer Discretionary Author: Yizhou Gu Editor: Luke Sheehan Aug 26, 2020 05:45 PM (GMT+8)

VIPKID shows its positive UE to respond to criticisms of its week profitability.

Image credit: EqualOcean

On August 18, VIPKID announced that the company’s Unit Economy (UE) has been positive since January 2020. VIPKID also mentioned that its customer acquisition cost has decreased by 45% since 2019. VIPKID now has paid users exceeding 800,000.

VIPKID is a fast-developing K12 education company in China. Based on modern live streaming technology, VIPKID is most famous for its one-to-one foreign teacher English tutorials (read more about VIPKID’s operational analysis here). Since reaching RMB 3 billion sales revenue in 2017 as a startup, VIPKID has become a unicorn in online education but has also been criticized for its negative net income since then. Having a positive UE in 2020H1 is a positive sign for VIPKID, showing its improved profitability.

VIPKID released its new product matrix. Except for one-to-one English tutorial, VIPKID also provides more economical online courses that applying AI technology and enlightenment education for children aged between 3 and 8.