Zuoyebang has raised more than US$1 billion till date and was valued at $6.5 billion prior to the investment
Chinese online tutoring platform Zuoyebang announced the close of its US$750 million Series E funding round, led by FountainVest Partners and Tiger Global Management.
Zuoyebang Founder and CEO Hou Jianbin disclosed the financing details in an internal letter to employees, made public today.
SoftBank’s Vision Fund, Qatar Investment Authority, Sequoia Capital China, Tiantu Capital, and Xiang He Capital also participated in the funding round, according to the letter. Zuoyebang is also backed by Goldman Sachs, Coatue Management, and GGV Capital.
Reuters had reported earlier this month, that the startup was looking for fresh funding at a valuation of $6.5 billion prior to the investment. The valuation of the company after this latest round of investment was not disclosed.
The startup has raised more than $1 billion to date and raised $500 million in its previous round of financing, which was led by Softbank Vision Fund I in November 2018.
The latest financing will be used for the development of new courses and products, as well as the innovation of new models and new businesses, according to a report by TechNode.
Founded in 2014 by search engine giant Baidu as a phase of Q&A website Baidu Zhidao, Zuoyebang spun off in 2015, and now claims to have more than 800 million cumulative active users, 170 million monthly active users, more than 50 million daily active users, and over 12 million paid users.
According to the announcement, Zuoyebang has served more than 1.3 million regular-priced live class students in a single season, developed more than 200 categories of quality course systems, and has more than 17,000 small partners in 11 cities across the country.
According to the latest data published by Zuoyebang, students in regular-priced classes have increased more than 10 times in the past two years, and the subscription rate exceeded 400% in the past year.
The spread of the novel coronavirus, which triggered global lockdowns, increased the need for online education.
According to global management consulting firm Oliver Wyman, one-third of China’s parents who used to be against online learning are now open to it, according to a survey of 30 large and mid-sized national and regional online educational training providers.
Zuoyebang has enrolled more than 1.3 million users for the 2020 spring semester regular-priced live-streaming courses, according to TechNode.
In 2018, between 56 million and 80 million people in China reported lacking either an Internet connection or a web-enabled device, according to government statistics. These figures, which largely pertain to vast swathes of China’s rural population, has also raised questions about online education’s inclusivity.
However, Jianbin said, “Today, we already have more than 50% of the live-stream students from non-first-tier and second-tier cities, which initially shows [our] inclusive capacity.” Further, he cited new features such as dual teacher live broadcast, group interaction, and appearance correction as signs that the industry is making great strides.
“But these are not enough. As the scale grows, users of different regions, ages, and levels continue to flow in. The form and quality of online education still needs constant exploration and innovation. In the pursuit of learning effects, we can never be complacent,” he added.
China’s online education market has experienced year-on-year growth of 23% since 2016. The market size and user base are projected to reach $59.6 billion and 241.6 million respectively by 2021, according to Research And Markets.
The huge uptick in usage and interest in online education worldwide has attracted huge investments—Chinese e-learning unicorn Yuanfudao raised $1 billion at a valuation of $7.8 billion less than two months ago.
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