Warburg Pincus, Genesis invest $120m in China's Zhangmen

This is the sixth round of funding for Zhangmen, whose previous investors include domestic GPs such as Shunwei Capital, Fortune Capital, and China Renaissance, according to AVCJ Research. The company will use the new capital to consolidate its position and expand into new segments of the online education market.

Zhangmen was founded in 2014 and provides personalized online tutoring services to Chinese students age 8-18 through its website and mobile apps. The company currently employs 30,000 full and part-time tutors teaching more than one million registered students across China. Zhangmen claimed to have recorded over RMB1 billion ($153 million) in revenue for 2017.

Warburg Pincus believes China’s K-12 online tutoring sector is poised for strong growth, given the combination of rising middle-class income and growing internet penetration. It expects the internet to account for over 10% of the overall after-school tutoring market by 2023. The GP's recent investments in the space include a $120 million funding round last year for Yuanfudao, a tutoring app that also offers a database of exams and practice papers.

Warburg Pincus is investing its latest global fund, which closed in 2015 at $12 billion, along with a dedicated China vehicle that closed in 2016 at $2 billion. Genesis is a late-stage VC firm founded in 2015 by Richard Peng, formerly head of M&A at Tencent Holdings.

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• Topics
• Greater China
• Technology
• Expansion
• China
• Warburg Pincus Asia
• Education
• TMT