China education player Zuoyebang raises $750m
Zuoyebang, a Chinese K-12 education platform that spun out from domestic search giant Baidu, has raised $750 million in Series E funding led by Fountainvest Partners and Tiger Global Management.
Other investors include Qatar Investment Authority, Sequoia Capital China, Softbank Vision Fund, Tiantu Capital, Xiang He Capital.
Zuoyebang claims to be China’s largest online education platform by user numbers. It has 800 million registered customers, including 170 million monthly active users and 50 million daily active users. It claims to be the only education app to be ranked among the 30 most popular apps in China.
The company further claims that its live broadcast classes are the fastest-growing product line of their type. The number of students paying standard prices has increased tenfold in the past two years and by 400% in the past 12 months. Users for the 2020 spring term exceed 1.3 million. In total, Zuoyebang's live stream classes have attracted 49 million students, of which 12 million are paying users.
Jianbin Hou, the company's founder and CEO, said that the uptake of online education in China is accelerating, but quality content and services must underpin offerings. The new capital will go into course services and product development as well as exploring new business models.
Zuoyebang was launched in 2014 on Baidu's Q&A site Baidu Zhidao. It became an independent entity the following year as part of an initiative to open certain businesses to external funding. The core business 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.
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 Capital and Xiang He. The Series C, which closed at $150 million in 2017, was led by H Capital. In 2018, Coatue Management led a $350 million Series D, which was followed by a $500 extension from Softbank Vision Fund.
Earlier this year, Chinese online education start-up Yuanfudao saw its valuation soar to $7.8 billion on closing a $1 billion funding round led by Hillhouse Capital. Zuoyebang, Yuanfudao, US-listed GSX Techedu, as well as the online units respectively under the educational giants New oriental and TAL together control about 80% of China's large-class K-12 space.
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