Tutoring Unicorn Yuanfudao Raises $300 Million as Tech Giants Circle

Chinese online-tutoring unicorn Yuanfudao has bagged a $300 million round of funding that values the company at more than $3 billion, as the sector attracts increased interest from tech giants like Tencent, Baidu and NetEase Inc.

Yuanfudao said in a post (link in Chinese) on its WeChat account on Tuesday that existing investor Tencent Holdings Ltd. led the latest financing round. Other backers were also existing investors — they include venture capital firms Warburg Pincus, IDG Capital, and Matrix Partners China.

Yuanfudao earned its coveted unicorn status in May 2017 when it raised $120 million from Warburg Pincus and Tencent. Unicorns are private companies with a valuation of at least $1 billion.

The Beijing-based online tutoring platform was launched in 2012. It boasts over 200 million users, but just over 1 million pay for the service. Yuanfudao offers a range of curricula, including English for primary school students and all-subject courses for secondary school students. Paying members are able to access one-on-one live tutoring at home led by Yuanfudao instructors.

The company said Tuesday it will use the proceeds to further develop its smart-learning technology to enhance the learning experience of its users.

Tencent also backs other online education operators such as Koolearn Technology Holding Ltd., which has plans to list in Hong Kong, as well as VIPKid, which is establishing a global footprint and said last week it will offer free online Mandarin courses to public school students in the U.S. city of Chicago.

Rival platform Zuoyebang completed a new funding round of $350 million in July led by technology-focused hedge fund Coatue Management. The company, which is backed by search giant Baidu Inc., didn’t disclose its valuation.

Contact reporter Jason Tan (jasontan@caixin.com)