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With the Series G funding, Yuanfudao’s valuation reaches US$7.8 billion
China-based online education unicorn Yuanfudao bagged US$1 billion amid pandemic-induced rapid market growth, according to a company statement on March 31. The Series G funding round was led by Hillhouse Capital and existing investor Tencent Holdings. The current infusion of funds has pushed Yuanfudao’s valuation to $7.8 billion from $3 billion in 2018.
Hong Kong-based Boyu Capital, US-based IDG Capital, and Matrix Partners China, a subsidiary of U.S.-based private equity giant Matrix Partners, also participated in the funding round. Including the latest financing, the startup’s total funding amount stands at around $1.5 billion.
As reported in DealStreetAsia, Yuanfudao Founder and CEO said, “The new investment is our Series G round and some people jokingly asked if we plan to use up all the letters of the alphabet.”
“The new round marks the continuous support and belief we have obtained from the capital market, as well as the arduous and lengthy path an online education company has to take,” he added.
The company operates in the Chinese K12 online education industry and claims to have 400 million users on its platforms. It has developed a series of online education products like the Yuanfudao mobile application, Banma AI Ke (Zebra AI Course), and other homework plans. It also has 11 teaching and curriculum development centres across China.
“Yuanfudao is gradually growing into a brand well known among our student users,” said Li.
In China, the Yuanfudao app ranked first in in-app purchases in the education category between January and mid-March, according to mobile app performance tracker application App Annie.
Earlier in March, Yuanfudao provided seed capital to India-based Pigeon Education which owns online learning platform Oda Class. According to an Oda Class press release, Li said that Yuanfudao saw its own commitment towards growth and development of the education system mirrored in Oda Class.
The COVID-19 outbreak and subsequent lockdowns have accelerated tech adoption in a lot of sectors. Elearning is thriving, with more and more students opting for online education amid the coronavirus pandemic.
According to CEO Li, “Education was among the industries that people had projected its disruptive change since the dawn of the Internet, but entrepreneurs in the past two decades failed to make it happen.”
According to the ‘China Online Education Industry Report, 2016-2021‘ by Research and Markets, China’s online education industry was worth $21.2 billion in 2016 while it is expected to grow to $59.3 billion by 2021. Furthermore, according to research firm Frost & Sullivan, the online education market in China is expected to reach $99.3 billion in 2023.
Header image: Annie Spratt on Unsplash