LAIX Inc, creator of English learning app Liulishuo, raised roughly $71.9 million in its Wall Street trading debut on Thursday, as it readies itself for expansion in the booming online education market.
Shares of the Shanghai-based firm closed up 1.2 percent at $12.65 per share on the New York Stock Exchange, after opening up 28 percent on Thursday morning.
Proceeds from the IPO will be used to finance research and development, as well as to continue to invest in and develop its current technologies, according to CEO Wang Yi.
The company also plans to boost its marketing activities to acquire more users and further strengthen its brand, as well as expand into the overseas market in the future, he said, without elaborating on details.
"LAIX refers to Life empowered by AI to reach (X) infinite possibilities," said Wang ahead of the IPO, explaining the firm's rebranding. "The listing will make us a more international company and help us to attract customers all over the world."
Founded in 2013 by Wang, a Princeton graduate and former product manager at Google Inc, Liulishuo - which means speaking fluently - aims to disrupt China's conventional brick-and-mortar language schools, by using AI, rather than humans, to teach English.
It records users' speech patterns before providing customized lessons and tips on how to sound more like a native English speaker.
The company had 83.8 million cumulative registered users globally at the end of June, according to its prospectus. It gives away basic lessons for free and charges fees for more advanced tutoring. It currently has more than 1 million paying customers.
"From day one we have not ruled out the possibility of delving into other realms using AI. But English learning is the one area that we would like to focus on right now," Wang said.
Consultancy iResearch forecast that China's booming online education market is poised to grow 20 percent annually, reaching 270 billion yuan ($39.2 billion) by 2019.
"This sentiment of continuous progress in the workplace is driving young Chinese white-collar workers toward a long-term remedy: education," said Du Miaomiao, an iResearch analyst.
Hujiang EdTech, VIPKid and iTutorGroup are among the startups that have raised funds recently to bankroll their expansion, and have adopted algorithms to optimize their products.
"Our users are shifting from 'learn to survive' to 'learn to advance and have fun,'" said Wang. "AI is set to make the learning process more efficient, tailored and accessible."