Chinese online K12 education provider raises $350m
Zhangmen, a Chinese online tutoring platform aimed at elementary through high school students, has raised $350 million in the first tranche of a Series E funding round.
The investment was led by CMC Capital Partners, China Investment Corporation (CIC), and CICC Alpha, a direct investment platform under China International Capital Corporation (CICC). Other participants include Sofina, Haitong International and Genesis Capital.
This is the seventh round of funding for Zhangmen, which has previously received backing from the likes of Warburg Pincus, Shunwei Capital, Fortune Capital, and China Renaissance, according to AVCJ Research. Last year, it raised a $120 million Series D led by Warburg Pincus and Genesis. The most recent round is said to be the largest ever for a company in the online K12 education space.
“The long-term growth potential for China’s K12 education industry is clear given the massive scale of the market and large user base. Compared to offline tutoring, online tutoring can cover a greater number of students, especially those in underdeveloped regions in China. It can also improve the efficiency of education and offer more learning approaches by using artificial intelligence and big data-powered tools,” said Guozhong Liang, chairman of CICC Alpha.
The new capital will be used to upgrade Zhangmen’s tutoring platform, with a view to bringing innovations such as computer vision technology, natural language processing, and voice interaction into the teaching process. The company will also develop more localized curriculums for different cities and provinces. This should help penetration of lower-tier cities.
Zhangmen is already implementing plans to broaden its content offering. It currently covers all the major subjects taught in Chinese K12 schools, but last year rolled out Zhangmen Peilian, a music tutoring service.
Founded in 2014, Zhangmen employs 30,000 full and part-time tutors who teach more than one million registered students across China through its website and mobile apps. The company claimed to have recorded over RMB1 billion ($153 million) in revenue for 2017.
According to iResearch Consulting, China’s K-12 online education market will be worth RMB150 billion by 2022, up from an estimated RMB44 billion by the end of this year. A lot of private capital has been drawn into the space, with the likes of Baidu spin-out Zuoyebang, 17zuoye and Yunfudao also raising sizable rounds in the past 12 months.
Other education start-ups have gained traction in different market segments. For example, VIPKid and Dada ABC are primarily platforms for English language courses, Kaochong focuses on university students, while recently listed Liulishuo targets English language learning for adults.
More on Greater China
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.