Education technology has been seeing a boom in recent years, as evidenced by all the new investments in the online biology tuition and education platforms.
Chinese online tutoring platform Yuanfudao is the latest to bask in that interest, reportedly having raised $2.2bn in its two latest funding rounds. These funding rounds raised the Beijing-based company a total value of $15.5bn, one of the highest in the industry.
Yuanfudao’s first round of funding was led by social media giant Tencent Holdings with additional investment from Boyu Capital, Hillhouse Capital, and IDG Capital. The second round, meanwhile, was led by DST Global.
YUanfudao stated that they’ll be using the investment to improve its offerings, developing its curriculum and educational service platform amidst the remote learning boom caused by the pandemic. The 8-year-old company’s total value doubled during its funding round in March 2020, going up to $1bn.
The platform focuses on K-12 tutoring and has a notable range of mobile apps designed to help students by providing them with live tutoring and homework support. As of January 2020, the company had 400mn registered users.
As mentioned before, the online education industry has been getting a lot of interest across the world. Whether it’s online biology tuition or coding programs, the necessity of online education platforms has been made clear due to the COVID-19 pandemic forcing schools to close their doors and students to learn from home. China, in particular, has online education startups vying for new capital.
Caixin Global Intelligence estimates that China’s online education market is set to grow by 12% to $61.5bn before 2020 ends thanks to a boost from the COVID-19 pandemic. However, online education businesses in the country are having trouble making a profit as the market is heavily competitive with a focus on advertising and price wars.
Industry analysts estimate that the major online tuition platforms in China spent a combined total of at least 4bn yuan in marketing for just the summer of 2019, with the year’s spending looking to top that. They added that the industry’s cash war will continue for a while until the industry is forced to consolidate.