If the U.S. Won't Pay Its Teachers, China Will

Cindy Mi leans forward on a couch in her sun-filled Beijing office to explain how she first got interested in education. She loved English so much as a child that she spent her lunch money on books and magazines to practice. By 15, she was good enough that she began to tutor other students. At 17, she dropped out of high school to start a language-instruction company with her uncle.

Today, Mi is 33 and founder of a startup that aims to give Chinese kids the kind of education American children receive in top U.S. schools. Called VIPKid, the company matches Chinese students aged five to 12 with predominantly North American instructors to study English, math, science and other subjects. Classes take place online, typically for two or three 25-minute sessions each week.

Mi is capitalizing on an alluring arbitrage opportunity. In China, there are hundreds of millions of kids whose parents are willing to pay up if they can get high-quality education. In the U.S. and Canada, teachers are often underpaid—and many have quit the profession because they couldn't make a decent living. Growth has been explosive. The three-year-old company started this year with 200 teachers and has grown to 5,000, now working with 50,000 children. Next year, Mi anticipates she'll expand to 25,000 teachers and 200,000 children.