Beijing-based online tutoring startup Zuoyebang on Monday said that it completed a new funding round of more than $1.6 billion, in the latest sign of investors’ growing interest in an industry that has flourished since coronavirus-induced lockdowns increased the popularity of e-learning platforms earlier this year.
Alibaba, Tiger Global Management, SoftBank’s Vision Fund 1, Sequoia Capital China and FountainVest Partners are among the investors, Zuoyebang said, without disclosing its valuation in the latest fundraising.
Zuoyebang CEO Hou Jianbin said that the new funds will be used to develop new products for K-12 students and apply new technologies to its services. K-12 refers to primary and secondary education before college, covering kindergarten through to 12th grade.
Being one of leading players in China’s booming online education market targeting K-12 students, 6-year-old Zuoyebang has found favor with venture capitalists this year. Monday’s announcement comes just six months after Zuoyebang raised $750 million in its series E funding round led by FountainVest Partners and Tiger Global Management.
The Baidu-backed company, which provides online courses and livestreamed video lessons to K-12 students, claims to have amassed 800 million registered users, of whom 170 million are monthly active users. About 70% of its paying users come from smaller cities where quality education is less accessible than in big cities, the company said.
The Zuoyebang app, the company’s flagship product, has adopted artificial intelligence technology that enables users to get help by simply uploading pictures of their homework, according to Zuoyebang.
China’s online education market is projected to grow by 12% to $61.5 billion this year, largely driven by the pandemic despite the fact that online tutoring firms struggle to be profitable as they spend heavily on marketing and engage in price wars to seize market share, according to Caixin Global Intelligence.
Contact reporter Ding Yi (email@example.com)