Baidu-backed Chinese online tutor Zuoyebang raises US$750 million from Tiger Global and Fountainvest
- The start-up claims over 170 million monthly active users
- Investment in China’s education sector has topped US$1.1 billion so far this year
Children hoping that school closures meant a break from homework were sadly disappointed as teachers took to online education during coronavirus-induced lockdowns.
Investors have been quick to catch on to the wave of digitisation in education during the coronavirus. They have flocked to back start-ups that promise to upgrade the conventional schoolroom using artificial intelligence and the internet for the 170 million K12 students in China.
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Zuoyebang, one of the largest in the field, has amassed US$750 million in a Series E fundraising from investors including New York-based Tiger Global and Chinese private equity fund Fountainvest Partners, it said on Monday on its social media WeChat page.
Beijing-headquartered Zuoyebang’s fundraising is one of the largest among the 131 across the Chinese education sector so far this year, which have raised a total of US$1.11 billion. This value is on par with the same period a year earlier despite the difficulties of bringing investors and start-ups together during lockdowns, according to data collected by alternative assets tracker Preqin.
There will be more bumper fundraisings later this year in e-learning, says Taihecap’s managing partner Frank Hu, as start-ups plug the offline gap between educational resources and demand in China’s sprawling provinces. About 80 per cent of Chinese live in third-tier cities and below.
“The significance of online education’s boom, especially of live-streaming courses, from 2019 to 2020, is no less than ride-hailing and mobile payment opportunities in 2014 and short video in 2017. It’s a rare transformational structural opportunity,” said Taihecap’s Hu.
Also known as zhibo.zuoyebang.com, which means “homework help” in Chinese, the start-up offers online courses to students from kindergarten to grade 12 by leveraging technology and the internet.
