Yuanfudao Becomes World’s Biggest Edtech Unicorn With US$2.2B Funding

With the latest funding round, Yuanfudao’s valuation has almost doubled since March to reach US$15.5 billion, overtaking Indian edtech company Byju’s as the world’s most valuable edtech.

Chinese edtech startup Yuanfudao has secured fresh financing of US$2.2 billion in two tranches of its Series G financing amid the global edtech investment boom, the startup announced in a press release yesterday.

The latest G1 and G2 funding rounds are an extension of Yuanfudao’s $1 billion Series G fundraise in March this year.

According to the press release, the latest financing has almost doubled the startup’s March valuation from $7.8 billion to $15.5 billion. With this development, Yuanfuadao has dethroned Indian edtech giant Byju’s to become the world’s most valuable edtech startup.

The Beijing-headquartered startup had raised $1.2 billion in its Series G1 round led by Tencent, with participation from Hillhouse Capital, Boyu Capital and IDG Capital last month.

This month, DST Global led the second tranche of financing in which Yuanfudao raised another $1 billion. The round also saw participation from CITIC Private Equity Funds Management, Singapore’s Sovereign Wealth Fund GIC, Temasek Holdings, TBP, DCP Capital, Ocean Link, Greenwoods Investment and Danhe Capital, the statement noted.

The company intends to use the fresh funds for technological innovation, expansion of its services, and to accelerate product and curriculum development, the statement said.

Founded in 2012, Yuanfudao offers a host of online learning products in the Chinese K12 segment. These include live tutoring platform Yuanfudao, english tutoring app Zebra AI Class, online question bank Yuantiku, question searching app Xiaoyuan Souti, and mathematics problem checking app Xiaoyuan Kousuan, among others.

Various online learning products provided by Yuanfudao Online Education (PRNewsfoto/Yuanfudao)

According to the statement, the Yuanfudao app for regular-priced basic online primary and secondary school courses, and its Zebra AI Class, currently have over 3.7 million paid student users, making Yuanfudao the largest edtech company in China by number of users.

The company also claims that its Zebra AI Class is the largest online preschool course platform in China. In an earlier press release, the company claimed to have a total of 400 million users across all its platforms, including the Yuanfudao app and Zebra AI Class.

Apart from its online platforms, the startup has also established a number of teaching and research centers and branches across major cities in China, such as Wuhan, Chengdu, Nanjing, and others, the statement said.

It added that these research centers employ over 30,000 employees, and in March the startup had announced that it would create 10,000 local jobs to support COVID-19 recovery efforts as part of its Corporate Social Responsibility strategy.

Further, according to a report by Equal Ocean, Yuanfudao had opened its second headquarters in Wuhan in 2017.

It is important to note that Yuanfudao is not the lone horse that investors are betting on in China. Online tutoring platform Zuoyebang had secured $750 million in June from renowned investors including Tiger Global Management, FountainVest Partners, Qatar Investment Authority, Sequoia Capital China, Tiantu Capital, and SoftBank’s Vision Fund, among others.

Moreover, amid China’s edtech boom fuelled by the lockdowns and social distancing measures implemented to curb the spread of COVID-19, the online education market in China is expected to be worth $81 billion by 2022.

Header image by stem.T4L on Unsplash

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email
Monika Ghosh
Monika Ghosh is a Staff Writer at Jumpstart

RELATED POSTS

Why Is the Metaverse Important for Your Brand

Why Is the Metaverse Important for Your Brand?

Metaverse is the older–and much more advanced–sibling of the internet, and it is on its way to becoming the favorite child of many brands. It is a new iteration of the web that is shaped by its users.

Top 5 Electric Car Companies of 2022

Top 5 Electric Car Companies of 2022

Business and political conversations in recent years have shown that you simply cannot talk about progress without mentioning sustainability. Startups and big corporations are having to upgrade their business models to factor in climate change and the environment. Shoppers have taken notice, too.

Asian Startups Set to Join the IPO Race in 2022

Asian Startups Set to Join the IPO Race in 2022

Despite the pandemic, 2021 had been a bumper year for initial public offerings (IPOs). According to the 2021 EY (Ernst & Young) Global IPO Trends Report, the global IPO market had a total of 2,388 IPO deals, raising US$453.3 billion in proceeds. Global IPO activity was up 64 percent in deal numbers and 67 percent in proceeds when compared to 2020.

How-To Tech Safe Internet Navigation Tips for Seniors

How-To Tech: Safe Internet Navigation Tips for Seniors

As you get older, it gets harder and harder to keep up with the advances in technology. Also, cybercriminals are exploiting the pandemic-induced shift to the digital realm to their benefit. The elderly lose US$30 billion a year to online scams, and as of 2020, there has been a 69% increase in online scam reports.

Why Are Jack Dorsey and Elon Musk against Web 3.0

Why Are Jack Dorsey and Elon Musk against Web 3.0?

“Sounds like BS” was Tesla CEO Elon Musk’s very eloquent review of Web 3.0. After all, few people know more about BS than Musk.
Web 3.0 has been touted as the internet of the future and a new generation of webs. It aspires to decentralize the internet using blockchain-based tokens. It will allow people to “own” their internet activities, thus doing away with the power of big techs, such as Amazon, Alphabet and the like.

Virtual Concerts—The Post-COVID Future of the Music Industry

Virtual Concerts—The Post-COVID Future of the Music Industry

Much like most other industries, the music industry also saw a hefty blow from the pandemic. Be it BTS, the Weeknd, Harry Styles or Bon Jovi, a lot of major artists have had to cancel their concerts throughout 2020. To make up for these canceled live interactions with fans, artists shifted to the Internet.