KKR joins $200m round for China coding education start-up
Hetao 101, a Chinese online education platform that provides computer programming courses for children, has raised $200 million in Series C funding led by KKR, Vision Plus Capital, and GL Ventures.
Source Code Capital and Huaxing Growth Capital re-upped in the round, which has been described as the largest ever seen for a child-focused computer programing start-up in China. Huaxing and Hillhouse Capital led a $50 million Series B in October 2019. This came less than four months after Hillhouse led a RMB120 million (US$17 million) round.
The new capital will go towards upgrading Hetao's technology and content and increasing headcount. The company has also launched a self-developed graphical programming tool - called Nuts - that will be integrated into different kinds of programming competitions.
Founded in 2017, Hetao targets children aged 4-12. It utilizes a double-teacher system - one human and one virtual. The latter has an artificial intelligence-enabled (AI) system that can track a student's progress in real-time and helps address errors. The human tutor follows up with open questions.
The company has more than 3.2 million paying students who are served by a teaching and research team of 400. Its course completion rate is 98%. Hetao claims a market share of nearly 70%. Qianzhan Industry Research Institute estimates the children's computer programming industry was worth RMB26 billion ($4 billion) in 2020.
There is a strong focus on competitions and exams. Approximately 30,000 Hetao students won national programming competition prizes in 2020, up 143% year-on-year. In the national youth software programming grade exam, Hetao students achieved a pass rate of more than 85%, an industry high.
Karen Zhang, who leads Greater China technology growth investment at KKR, expressed optimism about the long-term prospects for the children's programming education segment. This is KKR's third China investment under the tech growth strategy.
Codemao, Hetao’s main competitor, received RMB1.3 billion in Series D funding led by Baring Private Equity Asia last November.
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