What happened: Chinese tech giant NetEase is seeking to spin off its education unit for an independent initial public offering (IPO) in the US, Chinese media reported citing people familiar with the matter. The company is in discussions with two well-known underwriters for the listing. NetEase declined to comment on the matter when contacted by TechNode.
Why it’s important: NetEase, more widely known as a game developer, was one of the first Chinese tech giants to enter the online education market. NetEase Youdao, launched in 2007, started as a dictionary and translation app and branched out to different services that include search, language learning, and cloud. The company gained unicorn status after gaining a $1.1 billion valuation in April last year after receiving an undisclosed investment led by MOOC-CN Investment with participation from Legend Capital. The Nasdaq-listed parent company upgraded the edtech unit earlier this year by merging all of its education-related portfolios including the company’s massive open online course (MOOC) platforms to the current NetEase Youdao. Ding Lei, the president of NetEase, included education as a strategic focus for the first time at the beginning of this year, along with gaming, e-commerce, and music. If the listing succeeds, the education sector will be the first separate listing in the company’s portfolio.