By Ashley Galina Dudarenok China was one of the first countries to contain the COVID-19 epidemic with relative success, and the economy is better for it. The National Statistics Bureau reported 4.9% growth in China’s Q3 GDP year-on-year, showing improvement against both its 3.2% growth in Q2, and [...]
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.
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.
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