(Yicai Global) April 8 -- Chinese online tutoring platform VipKid is pulling back from its sub-brand Dami Wangxiao, Yicai Global learned today.

The Beijing-based firm will no longer invest in or offer personnel-related support to Dami Wangxiao and core staffers are withdrawing, including Zhang Yuejia, the co-founder of VipKid, who has returned to VipKid to take over its sales team, according to insiders familiar with the matter.

Dami Wangxiao is currently only offering lessons for the spring semester, which will finish in June, and it has not launched any courses for later this year, unlike most other online educators.

The company lacks core competitiveness and there were plans to shut it down even before this year’s Chinese New Year holiday as the growth in its number of users fell below expectations amid fierce competition, the people told Yicai Global.

Dami Wangxiao provides live-streaming courses designed for students aged from kindergarten to 12th grade, focusing on English and Math. Last year it secured USD80 million in A-round financing led by Chinese Internet giant Tencent Holdings, venture capital firm Sequoia Capital China and Tianjin-based equity fund Heima Zongheng.

VipKid became famous for its online education model that offers one-to-one tutoring and pairs students with teachers from North America, but doubts remain over its route to profit. Dami Wangxiao was part of its move toward larger class sizes, but VipKid may return to focusing on one-to-one teaching, the insiders said.

VipKid announced last August that the company’s unit economics had been positive since January and its customer acquisition cost had fallen by 45 percent since 2019, while its premium paying users exceeded 800,000. 

Editors: Zhang Yushuo, Tom Litting