Coatue leads $350m round for China education player Zuoyebang
Coatue Management has led a $350 million Series D round of funding for Zuoyebang, a Chinese K-12 education platform that spun out from domestic search giant Baidu.
Goldman Sachs, Primavera Capital Group, GGV Capital, Sequoia Capital China, and Tiantu Capital all took part in the round. There were also commitments from Xianghe Capital, NEA, and Taihe Capital, according to an announcement released by Tiantu.
Zuoyebang was launched on Baidu's Q&A site Baidu Zhidao in 2014 and became an independent entity the following year as part of an initiative to open certain businesses to external funding. It is an app-based service that enables students can seek answers to academic problems. They search online tests by taking snapshots of their textbooks or submit questions to teachers online.
As of July, Zuoyebang had more than 70 million monthly users, claiming a 70% market share. In 2016, the company launched a live-streaming service that has built up a base of over five million paid users, of whom more than half are in tier-three to tier-six cities.
Jianbin Hou, the company’s CEO, said the new funding would go towards investment in technology and teaching products, as well as recruitment and business development. Yunli Zou, a partner at Tiantu, added that Zuoyebang had not only accumulated a lot of users but also developed high-quality educational content that understands the pain points of the learning process.
The company received $25 million in Series A funding from Sequoia and Legend Capital not long after it spun out from Baidu. This was followed in 2016 by a Series B round of $60 million led by GGV and Xianghe. The Series C, which closed at $150 million last year, was led by H Capital and featured commitments from Tiger Global Management, Sequoia, Legend, GGV, and Xianghe.
Several Chinese online education start-ups have raised sizeable mid to late-stage rounds since the start of the year. Coatue also co-led a $500 million Series D-plus round for VIPKid, an English language learning specialist, with Sequoia, Tencent Investment, and Yunfeng Capital, while Temasek Holdings took the lead in a $250 million Series E for 17zuoye. In addition, DadaABC and Zhangmen raised $100 million and $120 million, respectively.
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