Several studies have found that virtual exchange (VE) has a positive impact on intercultural effectiveness (IE) development. However, few VE studies have measured and unpacked perceived learning gains from VE in this area using data from multiple VEs and mixed-methods approaches. In this study, we explored the impact of VE on perceived IE development among pre-service teachers in two exchanges. Using k-means cluster analysis of reported gains in IE, we identified three groups of students who reported high-medium-low IE gains. Cluster analysis informed our qualitative analysis of students' reflections on VE. Having analysed data from 486 diary entries at four successive time measurements, we identified three factors critical to students' perceived IE development: students' ability to overcome challenges during VE, level of engagement with their partners, and engagement with cultural difference. These findings shed light on what experiences in VE influence participants' perceptions of their intercultural learning. The study provides recommendations for the design of online collaborative learning programmes, such as VE, that might help address students' diverse needs.