Chinese online education firm Yuanfudao to raise $1.2b in new funding

Chinese online education platform Yuanfudao is set to raise $1.2 billion in a new funding round which will value it at about $13 billion, according to two people with direct knowledge of the issue.

Yuanfudao‘s existing investors, Tencent Holdings, Hillhouse Capital and Boyu Capital, will invest in this round, according to the people. The three are vying for a leading role in the fundraising with Tencent being the frontrunner, one of them said.

The eight-year-old company has nearly doubled its valuation within six months. In March, Yuanfudao raised $1 billion that valued it at $7.8 billion.

The company is planning to raise more fresh capital to include new investors in the near term at a different valuation, said one of the people, who declined to be identified as the information is confidential.

Yuanfudao and Boyu declined to comment. Tencent and Hillhouse did not immediately respond to requests for comment.

Yuanfudao‘s valuation surge comes as investors increase their bets on China‘s online education sector, which saw a surge of interest after the coronavirus outbreak triggered a migration to online classes.

Start-ups targeting K-12 education have been particularly popular, which raised 12.5 billion yuan in the first half, over 60% of the total amount raised by the sector, according to Chinese research firm IT Orange.

Online tutoring startup Zuoyebang in June raised $750 million in a fresh funding round, led by investment firms FountainVest Partners and Tiger Global Management

Technology-driven education services provider GSX Techedu has seen its share price more than triple this year, while shares of TAL Education Group, which runs several online learning platforms, are up more than 50%.

Yuanfudao, which says it has accumulated 400 million users and has 11 teaching and curriculum development centers across China, also counts IDG Capital, Warburg Pincus and Matrix Partners China among its backers.

Reuters

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.

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.