One of China’s top online tutoring platforms Zuoyebang announced Monday the completion of a $750 million Series E led by Fountainvest Partners and Tiger Global.
Why it matters: The coronavirus pandemic has drawn investor interest to China’s biggest education technology players as students were forced to study from home during lockdown.
- The funding comes fewer than three months after rival Yuanfudao raised a $1 billion Series G at a valuation of $7.8 billion.
Details: Company founder CEO Hou Jianbin revealed the financing in an internal letter made public on Monday.
- Other investors in the round include Qatar Investment Authority, Sequoia Capital China, Softbank Vision Fund I, Tiantu Capital, and Xianghe Capital, according to a statement from the company.
- The edtech startup said it has amassed upwards of 800 million registered users, of which 170 million are monthly active users and 50 million are active on a daily basis.
- The company said it has seen strong growth in its livestreaming business—full price subscriptions rocketed by more than 10 times over the past two years, and surged 400% year on year in 2019. The firm registered more than 1.3 million users for the 2020 spring semester livestreaming courses.
- The proceeds will be invested in course development and new products as well as the innovation of new models and new businesses, Hou said.
- More than 90% of China’s nearly 200 million K-12 aged students have access to broadband networks, according to Hou. “How to use technology to improve learning efficiency is the mission of online education. This is also a gift from this era,” (our translation) he said in the letter.
Context: Reuters reported in early June a pre-investment valuation of $6.5 billion.
- The company has raised more than $1 billion funding from its six previous funding rounds combined, according to corporate intelligence platform Tianyancha. The Softbank Vision Fund I led the company’s most recent $500 million Series D+ in November 2018.
- Zuoyebang was launched in January 2014 as a program incubated under Chinese search engine Baidu’s Q&A site Baidu Zhidao. The team was spun out in 2015 to build a Q&A platform dedicated to students of middle and primary school age.
- Initially starting as a tool where users would upload photos of their homework to get answers, Zuoyebang expanded to offer one-on-one Q&A sessions in 2014 and livestreamed tutoring in 2016.