Kuaishou backs Chinese online education platform Huohua Siwei

KKR and GGV Capital led a $85 million Series D round for the company in August. The extension takes the company's overall funding since inception to $190 million. Huohua told 36Kr that it plans to launch a new funding round with a target of $100-150 million.

Huohua claims to have realized annual revenue of RMB550 million ($78 million) in 2019, with monthly revenue reaching RMB85 million at the end of the year. As of March, it was RMB150 million.

The platform claims to pay lower customer acquisition fees due to its high-quality content. A one-hour course takes approximately five weeks or around 450 hours to develop. Lecturers must undergo a seven-round selection process, with only 5% of the applicants selected. The customer renewal rate is around 80% and the referral rate is 82%. 

Founded in 2017, Huohua now has more 2,000 lecturers who lead classes and tutors who provide support. It has accumulated more than 150,000 students aged three to 12 years. It offers small class sizes and interactive games. 

The company introduced artificial intelligence (AI) to its online courses last year. Classes are pre-recorded and students can choose their own learning pace. The AI system monitors individual learning behavior and adjusts content accordingly. There is no limit on the number of students that can participate. Huohua also expanded into Chinese-language learning in July.

According to AVCJ Research, Lightspeed provided the company's Series A round in 2016 and then IDG Capital and Hike led the first tranche of a $35 million Series B in 2018. Sequoia Capital China led the second tranche. A Series C round of $40 million, led by Northern Light and Wu Capital, closed in March of last year.

Kuaishou also invested in K-12 tutoring platform Jingzhunxue last year. Online education has become a popular investment theme as the COVID-19 outbreak led to schools being temporarily closed. Yuanfudao, one of the market leaders, recently saw its valuation soar to $7.8 billion on closing a $1 billion funding round led by Hillhouse Capital.

 

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• Topics
• Greater China
• Expansion
• Consumer
• Technology
• China
• Education
• KKR
• GGV Capital