Tencent backs China education service provider

It comes seven months after an initial $140 million Series D investment led by Warburg Pincus. That commitment was described at the time as the largest-ever funding round in China’s “K12-to-B” space, an online education sub-segment where companies sell directly to end-users.

Established in 2009, Aixuexi describes itself as an open-source education business that develops teaching materials and outsourced services for schools and other educational institutions. The company designs curricula for the elementary, junior and high school levels. Focus subjects include Chinese, English, mathematics, physics, chemistry, biology, history, and computer programing.

Aixuexi claims to work with more than 10, 000 educational institutions in 1,600 cities and countries nationwide, serving over 16 million students. Recent initiatives include a “dual-teacher” class, in which a teacher is supported by an artificial intelligence assistant. The program has now served 210,000 students in more than 1000 institutions, with a retention rate of 89.5%.

The company received Series A funding from Morningside Ventures in 2011 and then a RMB400 million ($59 million) Series B led by JD Capital in 2015. The Series C, completed in 2017, saw CMC Capital Partners and AlphaX Partners lead a RMB550 million investment. Other investors include Sinovation Ventures, China International Capital Corporation, Hina Group, and Loyal Valley Capital.

Jay Gu, a managing director at Loyal Valley, told AVCJ earlier this year that Aixuexi had taken a “totally different” path in the online education space by focusing on the end-user. “We think its way of supporting after-school tutoring institutions through its open source technology and platform is a sensible, asset-light means of achieving this goal,” Gu said.

China’s K12 online education market is expected to be worth RMB150 billion by 2022, up from RMB44 billion by the end of this year, according to iResearch Consulting. This has attracted growing investor attention in recent years, with start-ups including Zhangmen, Zuoyebang, 17zuoye, and Yunfudao raising sizeable rounds. More specialized language learning platforms including VIPKid and Dada ABC have also received significant funding.

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• Topics
• Greater China
• Early-stage
• Technology
• Education
• Tencent
• China