China Online Education Group (COE) Reports Acquisition of Kaola Reading

China Online Education Group (NYSE: COE), a leading online education platform in China with core expertise in English education, announced today that it has entered into a definitive agreement to acquire 100% equity interest in Beijing Xiangyue Education Technology Co., Ltd. ("Kaola Reading") a leading developer and provider of Chinese reading ability assessment systems and reading training systems in China, by issuing Class A ordinary shares of the Company through private placement. The Transaction is expected to close in the first half of 2021 in accordance with customary closing conditions.

Founded in 2016, Kaola Reading developed a graded Chinese reading standard, the Enjoy Reading (ER) Framework, in collaboration with the Machine Learning Laboratory of Peking University. Kaola Reading uses AI and machine learning technologies to assess and rate reading skills and make intelligent learning course recommendations based on each student's unique reading ability and interest. In May 2017, Kaola Reading launched its award-winning online Chinese learning app.

"We see clear strategic value in this acquisition," said Mr. Jack Jiajia Huang, 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. In addition, this acquisition broadens our course offerings to include Chinese courses, bringing a holistic learning experience to our students. We look forward to working closely with the Kaola Reading team and nurturing these new initiatives for our next phase of growth."

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