China K-12 education app Zuoyebang raises $60m Series B
Zuoyebang, a K-12 focused education mobile app that spun out from Chinese online search engine Baidu, has raised a $60 million Series B round co-led by GGV Capital and Xiang He Capital, a new VC firm set up by a former executive at Baidu.
Existing investors including Sequoia Capital and Legend Capital also participated, according to a statement.
Zuoyebang, which was launched on Baidu's Q&A site Baidu Zhidao in 2014, is a platform through which K-12 students can seek answers to academic problems. Students use the app to search online tests by taking snapshots on their textbooks, or they can submit questions to teachers online. The company has more than 175 million registered users, a database of 95 million homework answers, and 133 education company partners across China.
Zuoyebang spun out from Baidu in September last year as part of Baidu's initiative to open certain businesses to external funding. The unit subsequently raised a Series A round of funding from Sequoia and Legend Capital.
The new funding will be used to further consolidate Zuoyebang's leading position in the K-12 market, as well as supporting recruitment and the development of educational services such as one-on-one teaching and live classrooms.
According to iResearch, China's online education industry generated RMB119.2 billion ($18 billion) in revenue last year, 19.4% more than in 2014. Revenue is expected to reach RMB204.6 billion by 2018. All of the major domestic internet companies - including Tencent Holdings, Alibaba Group and Baidu - have entered the space, although their self-run platforms have been criticized for lacking quality. As a result, they are investing in third-party platforms.
In May, Tencent committed $40 million for a minority stake in Yuanfudao, which is backed by CMC Capital Partners and New Horizon Capital. The round was said to be the largest single investment made by the internet company in the K-12 online learning and teaching space at that time.
Xiang He Capital was founded by Hesong Tang, former vice president of Baidu. He was in charge of the firm's strategic M&A and other investments, including 91 Wireless, Qunar and iQiyi. Xiang He, which is part of the new Enterprise Associates (NEA) family of funds, focuses China's technology, media and telecom (TMT) and healthcare sectors.
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