H Capital leads $150m round for China’s Zuoyebang
H Capital has led a $150 million Series C round of funding for Zuoyebang, a K-12 focused education mobile app that spun out from Chinese online search engine Baidu.
Tiger Global Management also participated, alongside existing investors Sequoia Capital, Legend Capital, GGV Capital and Xianghe Capital. The latter is a VC firm set up by a former executive at Baidu. The company plans to use the proceeds to improve its teaching materials and strengthen its team, 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 of their textbooks, or they can submit questions to teachers online. The company also provides live teaching tutorials.
Zuoyebang spun out from Baidu in September 2015 as part of an initiative to open certain businesses to external funding. The unit subsequently raised a $25 million Series A round from Sequoia and Legend Capital. Last year, it secured $60 million in Series B funding led by GGV and Xianghe.
The company claims to have a more than 70% market share in the K12 online education market, with in excess of 200 million registered users. About 60 million of these users are monthly active users.
“I have been focusing on online education, and I believe that the combination of education and the internet will create great companies. Zuoyebang is one of them,” said Xiaohong Chen, founder at H Capital. “The team is well recognized, and they have made significant developments over the past two years. I believe the company will enjoy more success in the future.”
This is not H Capital's only investment in online K-12 education; it led a $100 million Series D round for teaching platform 17zuoye.com in 2015. Other PE investments in the space include a $200 million round last year for Xueleyun last year, led by New Horizon Capital, and more recently, a $120 million round for online tutoring platform Yuanfudao led by Warburg Pincus.
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