China Online Education Group (NYSE: COE), also known as 51Talk, announced Friday that it has struck a deal to acquire 100% equity interest in Kaola Reading in exchange for ordinary shares.
Kaola Reading, short for Beijing Xiangyue Education Technology Co. Ltd., develops Chinese reading ability assessment systems and reading training systems. For 51Talk, which provides one-on-one online English language learning, the move marks an expansion into Chinese course offerings.
"We see clear strategic value in this acquisition," said Jack Huang, the founder, chairman and chief executive officer of 51Talk. "Leveraging Kaola Reading's expertise in reading assessment, we plan to develop an English assessment and rating system that allows us to provide more targeted course offerings to our students, deliver enhanced learning experiences and outcomes, and add graded reading content to further diversify our curriculum portfolio."
51Talk, which has enjoyed stable business growth amid the pandemic, has been diversifying and investing in strengthening its online learning ecosystem. In March, the company announced the acquisition of an AI enlightenment English learning software, GKid, to further improve its AI capabilities.
Recently, the Chinese Academy of Sciences and Ipsos Group released a report on China’s K-12 online education, showing 51Talk has outperformed 16 of its rivals and holds 54% of the market share in the online English education sector.
The acquisition of Kaola is expected to close in the first half of 2021.