Education Platform 17zuoye Chalks Up $250 Million in Funding

Sunny Education Inc., which operates the online education platform 17zuoye, has raised $250 million in its latest round of financing, with the sector garnering ever-greater investor attention as its number of U.S. listings continues to grow.

“With the new funding, we will accelerate our expansion in the middle school and high school sectors, and further strengthen our leading position in the primary school sector,” company founder and CEO Liu Chang said in a statement.

The latest investment was led by Singapore’s sovereign wealth fund, Temasek Holdings, with the participation of new investors such as Citic Private Equity Funds Management as well as existing shareholders, including Shunwei Capital.

The company’s previous round of funding was in February 2015, during which it raised $1 million from investors, which also included Temasek.

The Beijing-based 17zuoye — pronounced “yiqi zuowe,” which sounds similar to the Mandarin phrase meaning “homework together” — was founded in late 2011. It provides interactive services and products for parents, students and teachers in primary- and secondary-school education, primarily mathematics and English-language courses.

Liu said the company broke even in November after establishing its two main monetization models: livestream tutoring and intelligent supplementary textbooks, with which it says it offers tailor-made content that is generated based on big data and artificial intelligence.

In addition to market expansion, 17zuoye intends to invest in content and technology to further improve the user experience and learning efficiency, he said. As of February, 17zuoye has served over 60 million users in approximately 120,000 schools, according to the statement.

The Chinese online learning market is booming as students and parents look for any avenue they can use to get ahead in the country’s fiercely competitive educational system.

Amid the bullish sentiment, last fall saw three Chinese education companies go public in New York: Four Seasons Education, RYB Education Inc. and Rise Education.

Meanwhile, Sunlands Online Education Group, which focuses on adult learning, is set to list in the U.S. on Thursday. Its updated filing on March 14 showed it plans to issue 13 million American Depository Shares, priced between $11.50 and $13.50 per share, to raise up to $175.5 million.

Contact reporter Jason Tan (jasontan@caixin.com)