Sequoia, Legend back Baidu’s education spin-out
Sequoia Capital and Legend Capital have invested an undisclosed sum in a Series A round of funding for Zuoyebang, a K-12 learning and teaching mobile app that spun-out from Chinese online search giant Baidu.
This is part of Baidu's ongoing initiative to open certain businesses to external funding, as part of efforts to promote independent quality assets and foster an innovation ecosystem, Haiwen He, senior strategy advisor at Baidu, told Tencent's QQ News.
The company's online food ordering platform - Baidu Takeout Delivery - raised $70 million from Chinese fast casual restaurant chain operator Ajisen Holdings, The Hina Group and its affiliate Hanking Group two months ago. Baidu also restructured its desktop app 91 Desktop as an independent company.
Zuoyebang, which was launched on the group's Q&A site Baidu Zhidao, is a platform through which K-12 students can seek answers to academic problems. As of August, it had more than 50 million registered users, about three million of whom are daily active users. At present the company has more than 95 million questions and answers on its database, as well as collaborating with 113 educational institutions across China.
According to iResearch, China's online education industry generated RMB83.9 billion ($13.2 billion) in revenue last year and will reach RMB173.39 billion by 2017. All of the major domestic internet companies - including Tencent, Alibaba and Baidu - have entered the space, although their self-run platforms have been criticized for lacking quality. As a result, they are investing in third-party platforms.
Last September, Baidu committed $10.6 in Series A funding to SmartStudy.com, an online education platform founded by former employees of New Oriental Education & Technology Group, a US-listed private school operator in China. Prior to that, Baidu teamed up with Hao Capital and DCM to invest in a RMB100 million Series C round for Beijing Wanxue Education, which specializes in training students for postgraduate entrance examinations.
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