• The Chinese education startup VIPKid, which connects fluent English-speaking teachers with Chinese students, raised $500 million in April for a valuation of over $3 billion.
  • The company is led by its 35-year-old high-school dropout founder, Cindy Mi, who believes the company can help bridge cultural gaps between China, the US, and elsewhere while making high-quality education accessible and increasing interactions between people of different cultures.
  • The company faces stiff competition but has thus far succeeded in large part because of its fervent community of more than 60,000 teachers, who generally seem enthusiastic about both the mission and the opportunity for supplemental income.
  • At the same time, some teachers of color have reported experiencing rude, awkward, ignorant, or racist incidents with parents and students.
  • The company has faced criticism from some teachers of color who say the company is not being proactive enough about addressing the issue.

Cindy Mi, the 35-year-old founder and CEO of the online-class startup VIPKid, remembers the day the education system failed her.

Mi was 14 and had just moved to Harbin, a city in northeast China. The move cost her half a semester of school, and she was severely behind the rest of her new class in math. With a class of 60 students, her teacher had little time to help Mi catch up.

A vicious cycle ensued: With little time to personalize lessons, the teacher would ignore Mi’s requests to further explain concepts. Later, the teacher would call on Mi to answer questions, but – not understanding the concepts – she couldn’t answer. The teacher became convinced Mi either didn’t care to learn or was incapable.

Eventually, Mi withdrew into herself, reading science-fiction magazines hidden in her notebooks during class. One day, Mi recalls, the teacher noticed, strolled over to her desk, ripped up the books, threw them in her face, and told her to get out and never come back.

"I left the classroom like a hero, but I had to return to school the next day, begging for her to take me back," Mi told Business Insider in a recent interview. "I lost all my confidence in learning."

The anecdote is something like Mi's origin story for VIPKid, the education company she founded in 2013 to connect fluent English-speaking teachers with young Chinese students for one-on-one 25-minute virtual tutoring lessons, in which students are taught English through an immersive curriculum that covers simple concepts like holidays and more complex topics like current events.

The Beijing-based startupraised $500 millionearlier this year at a valuation of over $3 billion and grew its revenue to $760 million last year from $300 million in 2016. The company said in August that it has over 500,000 students and over 60,000 teachers on the platform, close to double what was reported last year, and a massive jump from 3,305 students and 404 educators in 2015.

That makes it one of the fastest-growing startups not only in education tech, in which companies use technology to improve learning, but in all of China.

In her relentlessly positive and earnest way, Mi said she didn't blame the teacher for her inability to teach her. In a class of 60 students, she said, it would be impossible to provide the special attention many students need. But it is why she founded VIPKid.

In a country hungry to learn

Foto: The entrance to the company's original headquarters in a converted Taoist temple in Beijing. Most of the company has since moved to a much larger office.sourceHarrison Jacobs/Business Insider

In just five years, VIPKid has grown exponentially by capitalizing on China's appetite for quality education.

Education, and particularly English education, has long been a major focus of Chinese culture. The Organization for Economic Cooperation and Development went so far as to write in 2016 that the Chinese government saw education as the primary tool for "national development." In recent years, the education market has exploded in China along with the country's middle class. The banking group UBShas said the extracurricular education marketin China could grow to $165 billion in five years.

The first wave of tutoring companies in China came in the 1990s and early 2000s with brick-and-mortar classrooms, as the Chinese government placed a heavy emphasis on English proficiency as a hallmark of national competitiveness.By 2014, more than50,000 private language schoolshad opened in China, run by a mix of corporations and family-owned shops.

The biggest of those companies, New Oriental Education & Technology Group, founded by a Peking University professor named Yu Minhong in 1993, is projected to reach $2.2 billion in revenue this year. TAL Education, founded in 2003, operates more than 500 schools andreported revenue of $1.72 billionthis fiscal year.

While the English education industry may be thriving, quality English teachers are still difficult to find in China, particularly outside big cities like Beijing and Shanghai, and brick-and-mortar classes are expensive.

Foto: A VIPKid employee takes a call at the company's original headquarters in a converted Taoist temple in Beijing.sourceHarrison Jacobs/Business Insider

Mi says there are only 27,000 qualified English teachers from North America in China, hardly enough for the country'snearly 300 million young people. As a result, many are turning to online classes like those provided by VIPKid. The online English-tutoring marketis expected to hit $8 billionby next year, according to iResearch, a research group focusing on the Chinese internet.

Mi is no stranger to English education. She was part of that first wave. In 2000, at the age of 17, Mi dropped out of school to found ABCEnglish, a brick-and-mortar English education company, with her uncle. Her parents were encouraging.

"They said to me, 'Make the decision and don't come back in tears.' I learned the hard way early on in life that I need to be responsible for what I'm getting into," Mi said.

ABCEnglish was a small company competing among giants.

She did a little of everything to make it run: sales, buying books, interviewing prospective teachers, teaching classes, grading homework. She worked early in the morning until 10 at night.When she finished, she worked on her own studies until 2 a.m., eventually earning a bachelor's degree in English literature from Beijing Foreign Language University through China's system of incredibly difficult self-taught exams.

Eventually, she and her uncle grew the brick-and-mortar teaching business to $30 million in annual sales. But, like many entrepreneurs, she always wanted more: another challenge, more impact.

Building the global classroom

Foto: VIPKid CEO and founder Cindy Mi takes a photo with a VIPKid teacher at a meet-and-greet with teachers in Austin, Texas earlier this year.sourceCourtesy of VIPKID

To call VIPKid a language company misses the point. Like most tech entrepreneurs, Mi has a utopian vision that, while far outpacing today's operations, advances itself in the margins.

The near-term goal of VIPKid may be to democratize high-quality education, but Mi thinks the company can help create a generation of global citizens who understand the way the world is interconnected and thus promote understanding across cultures. For Mi, it has always been clear to her that language learning isn't really about the language. She taught herself how to speak English by immersing herself in American pop culture and English literature. The first songs she learned: John Denver's "Take Me Home, Country Roads" and "Yesterday Once More" by the Carpenters.

"It's about knowing the world and empathizing with other cultures," Mi said. "In China we talk a lot about this 'shared future' concept. But how do you share a future if you don't really empathize or understand each other?"

“I only commit to things that have a mission.”

Foto: VIPKid CEO and founder Cindy Mi talks to teachers at a meetup in Central Park in July. Kevyn Klein, VIPKid’s US-based head of community and growth is third from the left.sourceCourtesy of VIPKID

When Mi begins to speak about the future, her eyes grow big and her ever-present smile broadens even more than usual. She speaks in grand terms, talking about building a "global classroom," mentioning the book turned movie "Ready Player One" and the ability of a virtual world to be one where people from all over the world are able to understand one another better by learning together.

"What if you had students gathering around the pyramids virtually to learn everything about them?" Mi riffed. "What if you had a classroom of students, each from a different country, talking to each other in a global channel? In my beautiful future dreams, I see children learning from one another."

That grand mission is what drewKevyn Klein, VIPKid's US-based global director of community, to the company. After spending her first decade in the workforce split between the idealism of the nonprofit Teach For America, for which she taught for three years, and the sometimes difficult reality of education tech, where she worked after, Klein said she felt jaded. Mi's optimistic vision was what Klein had been waiting to hear.

"I only commit to things that have a mission," Klein told Business Insider. "When I heard Cindy's mission to use a global classroom to create global citizens, I realized that this was so much more than an ESL company."

The mission and the acolytes

Foto: Developers work on VIPKid's platform from the company's original headquarters in a converted Taoist temple in Beijing. Most of the company has since moved to a much larger office.sourceHarrison Jacobs/Business Insider

Speaking with Business Insider, Mi talked at length about how the worldly perspective she says she gained from studying for her MBA at Johnson Cornell in the US was accessible to only a select - primarily wealthy - few.

"We always talk about how diplomats' kids understand the world in a very different way," Mi said. "They're able to connect with everyone when they grow up. But what if we have kids everywhere be ambassadors of their own cultures, learn about other cultures, and become ambassadors for other cultures?"

The mission has drawn more than a few acolytes.

"This is a global conversation that is happening and has to happen," Yasche Glass, a 43-year-old high-school science teacher who has been teaching for VIPKid since 2016, told Business Insider. "With the way technology is evolving, there is no cultural divides anymore.

"We have a real opportunity to reach people in their homes more than we've ever been able to before."

As with most gig-economy companies, appealing to teachers is as important to VIPKid as drawing in new parents and student customers. Today, many competitors, such as 51Talk, DadaABC, and VIPJunior, are competing for the same pool of teachers.

But VIPKid has a higher valuation and more students than its competitors, by most accounts, and is known to place a high value on its teachers and generate fervor among its teacher community.

Foto: VIPKid's offices are emblazoned with Dino, the company mascot is, who teachers say you don't really understand until you see how students react to him in class.sourceHarrison Jacobs/Business Insider

In March, VIPKid held a teacher conference in Salt Lake City called Journey. About 250 teachers attended at their own expense. The attendees ended up purchasing $7,000 worth VIPKid merchandise, including mugs, T-shirts, and stuffed animals, Mi said. Another Journey conference is scheduled for August.

A few days later, VIPKid held a gathering for teachers in Texas, the company's biggest community of teachers, 5,000 in total. Fifty teachers came with their families to meet Mi. At one point, the teachers - having all heard Mi's story of learning English to John Denver - broke out in song, singing "Take Me Home, Country Roads" in its entirety.

Though teaching for VIPKid is undoubtedly an individual endeavor - one-on-one teacher to student - the company and many of its teachers seem to pride themselves on the vibrant support community online, primarily expressed through Facebook groups with massive membership (one group boasts more than 15,000 teachers).

Operating like a digital teachers lounge, the conversation in the Facebook groups largely tends toward the relentlessly positive disposition of the company.

Teachers discuss teaching strategies, difficult students, troubles getting booked, financial difficulties, and how to get through the February slump (around the Lunar New Year, bookings drop off a cliff as Chinese students go on long vacations to visit family), all through can-do encouragement. Offline meet-ups like Lunar New Year celebrations have followed.

While Klein, and the company, support the groups, most were started by teachers.

"So much of this is driven by" the teachers, said Klein, who has built teacher communities for numerous edutech startups. "That's the difference. When teachers are choosing what company they want to work for, they want a company invested in their success."

Lost in translation

Foto: A group portrait of VIPKid teachers at the company's Journey conference in Salt Lake City, Utah in March.sourceCourtesy of VIPKID

Not all teacher-student interactions begin smoothly, however, and the experience of some VIPKid teachers illustrates the challenges in carrying out Mi's utopian vision.

Teachers on the VIPKid Teachers of Color Facebook group, which has more than 1,800 members, frequently describe having unsettling interactions with parents and students or difficulties booking students that they feel is tied to their race, according to Tameka Bazile, who began working for VIPKid in October and started the page in November after being unable to find a similar group in the teacher community.

ESL companies in China, and many of the parents and students who pay for the classes, have long been known to prefer foreign teachers to be white. While discrimination is prohibited in China by various laws and the government has worked to address the problem, employment discriminationis common. Some ESL companies outright say in ads theywouldn't hire Asian or black teachers.

"Many Chinese people still associate English proficiency with white skin, assuming that anyone who is black must be from Africa, and those who are Asian obviously don't speak English as well as their white peers," Richelle Gamlam, a blogger who previously taught English in China,wrote in a blog in 2016.

The more than half-dozen teachers interviewed for this article said no such issue existed for VIPKid, but many described awkward interactions with students or with parents who booked the service.

Cecily Cooper, a public-school ESL teacher who started working for VIPKid in January 2017, said it was not uncommon for parents booking a trial class - in which VIPKid chooses the teacher - to see her face and say, "Oh my god, she's black." In most cases, the reaction is simply surprise: Most Chinese people have never met or interacted with a black person before.

In February,Beatrice Carre-Alleyne, a 43-year-old black woman who began teaching for VIPKid in 2017, posted a video on Facebook in which a 7-year-old student, upon seeing Carre-Alleyne, exclaimed that she was a "monster" and "ugly" and made a reference to her race.

"I was surprised. I was hurt. I was angry. I wanted to cancel the class," Carre-Alleyne told Business Insider in an interview. "Then I saw that her face wasn't angry or malicious but just curious."

In the Facebook video, Carre-Alleyne can be heard gently correcting and challenging the student, turning the incident into a teachable moment.

"I know she is trying to ask something," she told Business Insider. "I wanted to give her a space to do that, while also voicing my opinions about what she said."

The response to the video from fellow teachers, according to Carre-Alleyne, was "overwhelming." Two days after the video was published, VIPKid contacted Carre-Alleyne, she said, to invite her to the Journey conference, where Mi apologized to her personally for the incident.

"We don’t look like what they stereotypically think of as an American."

Foto: sourceHarrison Jacobs/Business Insider

Bazile said it was not uncommon for teachers of color to experience similar interactions and that many were "amazing" at turning them into "teachable moments." But, she said, there remains a feeling among many teachers of color that VIPKid could be doing more to mitigate such issues before they occur.

Tamesha Rumbles, a California-based VIPKid teacher, described in a July vlog on YouTubehow one student, upon seeing a picture of a black family in the lesson plan, began saying "yucky dark family." In a class about strangers, Rumbles said, another teacher she knew asked the student, "Who are the bad people?" The student instantly responded, "Dark people." In both cases, Rumbles said, the teachers corrected the student.

"What we are talking about is not made up," Rumbles said in the video. "What we are talking about is not exaggerated."

In a statement, the company said it is "concerned" to hear about the interactions, that it "takes all reports of offensive or inappropriate behavior" seriously, and that it is "company policy to review" all such reports, and, "where necessary, take appropriate steps to address it." The company added that it has confidence that "as students become more accustomed to the diversity of teachers" on the platform, such interactions can "effect a change of attitude in the students toward teachers of different races and cultures."

Glass,the high-school science teacher, who is black, said that while some teachers have experienced such incidents, she often experienced "open-minded parents" who booked her precisely because they wanted to expose their children globally.

"We don't look like what they stereotypically think of as an American," Glass said. "But I don't think it's bigotry. They just don't know."

Glass, who teaches primarily older students, said her students frequently asked about the black experience in America, often prompted by the curriculum.A lesson on "America's Heroes," according to VIPKid, introduces students to African-American figures like Harriet Tubman and Martin Luther King Jr., as well as the history of slavery and the civil rights movement. Another lesson introduces students to the pan-African holiday of Kwanzaa and its historical roots.

"We're teaching things that are not even found in American textbooks," Glass said.

But not all are happy with the curriculum's representation of race.

In April, Bazile and Hope Williams, a VIPKid teacher who was previously an administrator of VIPKid Teachers Community, one of the largest Facebook groups at more than 15,000 members, held a wide-ranging public Facebook Live session to discuss issues faced by teachers of color. One particular point of concern expressed by both was how nonwhites were represented in the curriculum. In one example, the two discussed how a lesson about occupations showed an image of a white working professional followed by a black janitor.

"To a lot of teachers this is not a big deal," Bazile said. "But perception is reality, and the reality of it is you are creating what I would interpret as subliminal messaging to these students."

The company said, in a statement, that the lesson on occupations shows multiple images of janitors, depicted as a Caucasian woman and Caucasian man, in addition to the image of the African-American man.

"We welcome and listen to teacher feedback on the curriculum and have made (and continue to make) changes to reflect such feedback," the company said, adding that it is "sensitive to the issue" and strives to create a curriculum that is "balanced, respectful, and sensitive to the value of diversity."

Bazile, whose day job is as a residence coordinator at La Salle University, said VIPKid had acted swiftly in dealing with specific issues raised by teachers, such as removing parent feedback directly referring to a teacher's race.

But, she said, she and fellow members of the Teachers of Color group have called for VIPKid to act "proactively" by teaching the company's parent customers about diversity in America, involving teachers of color in the construction of the curriculum, featuring teachers of color in advertisements in China, and releasing a statement to the company's Chinese customers explicitly supporting teachers of color.

In response, the company told Business Insider in a statement that it "treasure[s] the tremendous diversity" of the teacher community, noting that many of the most active teachers on the platform and in the community "come from diverse racial and ethnic backgrounds." The company also said that it strives to "accurately depict" its "diverse teacher representation" in ads and branding and that it "welcome[s] this feedback."

American kids used to learn from Mr. Rogers — Chinese kids now have VIPKid teachers

Foto: VIPKid teachers pose with CEO and founder Cindy Mi at a teacher meetup.sourceCourtesy of VIPKID

Despite the challenges teachers face individually, Mi's vision of a global classroom is already being realized.

To illustrate how, Klein paints a scenario common to VIPKid teachers and students: A 5- or 6-year-old Chinese student signs on to VIPKid for the morning lesson from an American teacher in rural Mississippi. The student is sitting in his or her parents' restaurant, or perhaps at grandparents' house.

"What you are seeing on a bigger community level is an American teacher entering a Chinese home, meeting the parents and grandparents," Klein said. "When we were growing up, we were exposed to Mr. Rogers. Right now, they are being exposed to all these diverse teachers."

The growth in understanding isn't theoretical. It's happening on the ground - and not just for the Chinese students but for the primarily American teachers as well. This past year, members of the VIPKid teachers' community - many of whom have had little, if any, previous interactions with Chinese people - independently organized 50 Lunar New Year celebrations across the country.

Last August, VIPKid launched Lingo Bus, a one-on-one teaching platform for children to learn Mandarin Chinese from fluent speakers. VIPKid has said it hopes the platform can work for American children in much the same way VIPKid has operated for Chinese children. Some teachers told Business Insider their children had begun using Lingo Bus so they could communicate with their parents' students.

Foto: VIPKid CEO and founder Cindy Mi embraces a teacher at the Journey conference in Salt Lake City, Utah in March.sourceCourtesy of VIPKID

Mikell Brown and her husband, Nick, have taught for VIPKid for the past year, taking on 25 lessons and 55 lessons a week, respectively. For Brown, the cultural education has been one of the most rewarding aspects of the experience. Through the classes, she has picked up knowledge about important Chinese festivals and cultural traditions and has learned simple words for her students.

"Culturally, it has just opened my eyes to the beautiful, wonderful country," Brown told Xinhua, a state-run press agency, in May. "Even my children, any time they hear about China, they say, 'Oh, my mom works in China.' And they love it."

Brown told Business Insider about a moment this past winter when she realized her student had never seen snow. Brown, who lives in Utah, pointed the webcam out the window so the student could see the mountainous Utah landscape blanketed in white. The student was fascinated. It was a special moment, she said.

Foto: VIPKid's original headquarters looks out onto Beijing's Bell and Drum Tower.sourceHarrison Jacobs/Business Insider

Valerie Ragland, a 44-year-oldinfant nurse, first began teaching for VIPKid in late 2016 to save money for her wedding. A few months after the wedding, her husband asked when she was going to stop working for the company. She is now the administrator of VIPKid's largest Facebook group, VIPKid Newbie Support (more than 24,000 members), in which new teachers interact in a kind of digital teachers lounge.

Ragland's first student was an 8-year-old girl named Kitty. After a few lessons, Kitty announced that she was going to get her long jet-black braids cut short so she and Ragland could be twins.

"I'm an African-American from Dayton, Ohio," Ragland told Business Insider. "She's in China. She saw me. She still doesn't know what that meant to me." Ragland had liver failure a few years prior, she says, and had to shave one side of her head.

"For this little girl to want her hair cut like me, with all my imperfections and short hair, it changed the way I looked at my relationship with all of my students," Ragland said. She recently told her husband that she plans to keep teaching permanently. The impact she is having on students on the other side of the globe, she said, has her hooked.

"They weren't just green boxes. It was a child whose parent loved them as much as I loved my child."