Baidu-backed online tutor Zuoyebang seeks new funding at $10b valuation

Visual of Zuoyebang homepage. October 2016.

Chinese online education startup Zuoyebang has started a new fundraising drive at a valuation of $10 billion, said two people with direct knowledge of the matter, as investor appetite for the sector continues to surge amid the COVID-19 pandemic.

The company aims to raise around $650 million in the new round, said one of the people, who declined to be named because the information is private.

Existing investors including FountainVest Partners, SoftBank, Sequoia Capital China and Tiger Global Management are planning to invest in the latest round, they said, adding some new investors are also expected to participate.

A Zuoyebang spokesman told Reuters that “the numbers” are not accurate, but didn’t provide further details. FountainVest declined to comment to Reuters. Sequoia, SoftBank and Tiger Global did not immediately respond to requests for comment.

The fundraising comes as education technology is one of the few sectors that thrived in the pandemic as students were asked to take online classes from home after China and other countries imposed a lockdown.

That has bolstered the valuation of these companies.

Zuoyebang, which is backed by Chinese search firm Baidu Inc, announced in June that it raised $750 million in a financing round led by investment firms FountainVest and Tiger Global. That round valued the startup at $6.5 billion prior to the funds flowing in.

Zuoyebang‘s main rival Yuanfudao, backed by Chinese gaming and social media giant Tencent, is also in talks to raise $1.2 billion in a new funding round that will value it at about $13 billion, almost doubling its valuation since March.

Students in China can upload their homework questions and search for answers on Zuoyebang‘s platform, which uses artificial intelligence. The company has also launched live-streaming courses.

Startups targeting K-12 education have been particularly popular with investors, raising 12.5 billion yuan in the first half, over 60% of the total amount garnered by the sector, according to Chinese research firm IT Orange.

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.