Zuoyebang, a Beijing-headquartered startup that runs an online learning app, said on Monday it has raised $750 million in a new financing round as investors demonstrate their continued trust in -- and focus on -- Asia’s booming edtech market.
U.S. investment firm Tiger Global and Hong Kong-based private equity firm FountainVest Partners led the six-year-old startup’s Series E financing round. Existing investors -- including SoftBank’s Vision Fund, Sequoia Capital China, Xiang He Capital and Qatar Investment Authority -- also participated in the round, which brings the startup’s to-date raise to $1.33 billion.
As we have previously noted in our coverage, Zuoyebang’s app helps students -- ranging from kindergarten to 12th-grade -- solve problems and understand complex concepts.
The app, which offers online courses and runs live lessons, also allows students to take a picture of a problem, upload it to the app and get its solution. The startup claims it uses artificial intelligence to identify the question and its answer.
Zuoyebang, which targets K-12 students enrolled in the national compulsory education system, has amassed 170 million monthly active users, about 50 million of whom use the service each day, the startup said in a post (in Chinese). More than 12 million of these users are paid subscribers, it said. For comparison, China had about 200 million K-12 students in 2019, according to the Ministry of Education (in Chinese).
The announcement today further illustrates the opportunities investors are seeing in the online education sector in Asia. Last week, Indian edtech giant Byju’s announced it had received fresh funds from Mary Meeker’s fund, Bond.
SoftBank counts Zuoyebang among its 88 portfolio startups that have demonstrated growth in recent quarters. Zuoyebang was founded by Baidu in 2015. A year later the Chinese search giant spun off Zuoyebang into an independent startup.
Zuoyebang competes with a handful of startups in China, including Yuanfudao, which offers a similar service. In March, Yuanfudao said it had secured $1 billion in a financing round led by Tencent and Hillhouse Capital. The startup was valued at $7.8 billion at the time. Reuters reported earlier this month that Zuoyebang could be valued at $6.5 billion in the new financing round.
According to research firm iResearch, the online education market in China could be worth $81 billion in two years.