GIC leads $200m round for Chinese teaching materials supplier

Previously known as Gaosi Education, the company has now raised $300 million in Series D funding. Warburg Pincus led an initial tranche of $140 million in April 2019 and a second tranche followed seven months later, with Tencent Holdings among the participants. 

Aixuexi now claims to be the largest unicorn in China’s 2B education space, which encompasses online education start-ups that serve education providers rather than students directly. Chuan Li, CEO of Aixuexi, said the new funding would be used to help traditional education and training providers embrace online-to-offline business models. 

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. Subjects include Chinese, English, mathematics, physics, chemistry, biology, history, and computer programming.

Aixuexi claims to work with more than 20,000 educational institutions, a 100% increase on the previous year. These establishments serve more than 25 million students across 1,600 cities and counties. Its flagship product is a “dual-teacher” class, whereby an online teacher is supported by a local teaching assistant. Over 5,000 dual teacher classes have been launched by 2,000 institutions.

"Lower-tier cities have an urgent need for high-quality educational content and teachers. Aixuexi’s open platform meets this need and helps offline institutions develop O2O business models. We are optimistic about the long-term development potential of S2B2C and that's a fundamental reason why we continue to invest in this company," said Yi Ding, a managing director at Warburg Pincus.

During the COVID-19 outbreak, Aixuexi offered a range of free services that helped offline education providers transition to online teaching. It claims to have played a role in the continued education of more than four million students while schools were suspended. “Some offline institutions not only retained their old students but attracted new students as well,” the company said in a statement.

Aixuexi also collaborates with technology companies, including Tencent Cloud and SenseTime. In April, it teamed up with Huawei Technologies to explore areas such as 5G, artificial intelligence, big data, and the internet of things, and to launch K-12 education and OMO - online merging with offline, a version of O2O - products.

The company received Series A funding from Morningside Venture Capital (now known as 5Y Capital) in 2011 and then a RMB400 million ($59 million) Series B led by JD Capital in 2015. The RMB550 million Series C, completed in 2017, was led by CMC Group and AlphaX Partners. Other investors include Sinovation Ventures, China International Capital Corporation, Hina Group, and Loyal Valley Capital.

China’s K-12 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. Online-oriented businesses have attracted substantial amounts of PE funding. Yuanfudao recently became the most valuable education start-up globally, achieving a valuation of $15.5 billion in its Series G round.

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• Topics
• Greater China
• Expansion
• Technology
• China
• Education
• GIC Private
• Warburg Pincus Asia