Sequoia China-backed Spark Education withdraws $100m US IPO

REUTERS/Eric Thayer

Spark Education, a Chinese K12 after-school tutoring firm backed by Sequoia Capital China, has filed to withdraw its initial public offering (IPO) in the US, joining a list of Chinese firms that have flocked to pull the plugs on planned listings this year.

“In light of the current capital markets condition, the company is considering other alternatives and has determined not to proceed at this time with the offering and sale of the securities,” Spark Education said in its request to the US Securities and Exchange Commission.

The Beijing-based company had originally filed for a $100-million IPO on the Nasdaq in June after securing a total of over $400 million in a Series A round through three capital transactions.

Its early investor Sequoia Capital China currently holds a 10.5% stake. The firm’s backers also include GGV Capital, IDG Capital, HIKE Capital, and Lightspeed China Partners.

Spark Education moved towards a public listing in June even as the regulator in China is tightening scrutiny over online education. In that month, the Chinese government set up a new department to supervise after-school tutoring institutions.

In May, edtech giants Zuoyebang and Yuanfudao, were slapped with fines of 2.5 million yuan ($385,647.7) each for false advertising.

Spark Education noted in its original filing that “uncertainties in the interpretation and implementation of, or proposed changes” to the Chinese laws and regulations for the online K12 market is one of the major risk factors for its business development, alongside others including the intense market competition in China.

Spark Education’s after-school tutoring platform is designed to help students develop lifelong skills like creativity, critical thinking, and problem-solving, unlike other exam-oriented learning approaches, according to its prospectus.

It offers three main subjects: mathematical thinking, Chinese, and English. Classes primarily include four to eight students. The company was the largest online small-class education company in China by gross billings in 2020.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.