Chinese tutoring service provider Yuanfudao said it had raised $120 million in a new funding round led by global private equity firm Warburg Pincus, marking the largest ever financing round in the country’s online tutoring industry.
Existing investor Tencent also joined the round. The deal will see Yuanfudao become China’s first online K-12 tutoring service provider to achieve the unicorn status, used to describe companies that have a valuation exceeding $1 billion.
“Education is a lasting theme in every Chinese family with significant investment, and Yuanfudao has established itself as a pioneer in China’s online education sector with a mature business model, leading scale and brand. Unlike the traditional tutoring model, which requires intensive offline resources, online learning is becoming a primary choice of Chinese families thanks to its easy access and high efficiency,” said Gordon Ding, Managing Director of Warburg Pincus.
Founded in 2012, Yuanfudao claims to be the largest online live course platform servicing primary and secondary school students in China. With a paying user base of over 1 million, Yuanfudao offers a curriculum spanning from primary school English, Mathematical Olympiad to all-subject courses in secondary school.
The company said its three mobile apps – Yuanfudao, Yuantiku and Xiaoyuansouti – currently have over 160 million of student users. It added that its independent online professional test preparation platform, Fenbi, was a leader in China’s civil service test preparation market with the largest number of enrollments.
Since entering the Chinese market in 1994, Warburg Pincus has invested over $7 billion in nearly 100 companies in China, including leading technology and internet companies 58.com, RDA Microelectronics, Uxin, Liepin and Weidian. The firm’s over 30 portfolio companies in China include China Huarong, UCAR, Baosteel Gases, ZTO Express, Red Star Mecalline, Kidswant, Amcare, Evercare, China Jinmao, Mofang Apartment, Mobike, NIO and Souche.