___________________-500937909.thumb_head

Photo/Shetuwang

Mar. 31 (NBD) – Chinese online education startup Yuanfudao has completed a new round of financing worth 1 billion U.S. dollars, which is the biggest ever in China's education sector, founder Li Yong said Tuesday in an internal letter sent to employees. 

The financing round is led by Hillhouse Capital and followed by Tencent, Boyu Capital, and IDG Capital. The investment made Yuanfudao the most valuable among unlisted education startups in China, pushing its valuation to 7.8 billion U.S. dollars.

Yuanfudao was established in 2012, and had previously received 7 funding rounds. With a focus on K12 education, its products include online tutoring for primary and secondary school courses, which have over 1 million paying students, homework checking, and AI-powered courses for children aged 2 to 8 years old, which have over half a million paying users.

Yuanfudao's revenues for 2019 were around 3 billion to 4 billion yuan, and has targeted over 10 billion yuan in revenues in 2020, an industry insider said.

The COVID-19 outbreak has kept over 180 million primary and secondary school students in China at home, and online learning became a substitute for classrooms.

According to statistics from big data firm QuestMobile, daily active users (DAU) of education apps had increased from 87 million before the Lunar New Year holidays to 127 million. App DAUs in the K12 sector had increased by 23.81 million.

Huge demand for online education services has attracted investors. According to China Venture Info, total investment in online education surged by 275 percent year-over-year in February, while venture capital investment in general suffered a bleak winter exacerbated by the COVID-19 pandemic, declining by 63.07 percent year-over-year.

Tech giants are making moves into the sector as well. Earlier in March TikTok's owner ByteDance said education will be a key new sector in its 2020 strategy, and set out a massive plan to recruit 10,000 employees for its education business.

Leading e-commerce platform Pinduoduo (NASDAQ: PDD) has also launched a math equation app on Huawei's app store, which is widely viewed as its attempt to expand into the education sector.

 

Email: lansuying@nbd.com.cn

Editor: Li Menglin