Alibaba Group and Tiger Global Management headed a $1.6 billion investment in Chinese online education startup, Zuoyebang, giving extra weight to how the coronavirus pandemic has switched distance learning into a very popular business.
Current backers Softbank Vision Fund, Sequoia Capital China and FountainVest Partners also became a part of the funding. The newest rounds included Goldman Sachs and GGV Capital as the investors, and in June it had brought on $750 million.
A majority of students had to start e-learning this year, due to the pandemic, which made investors swarm towards the industry. It is predicted for China’s online learning market to reach 315 billion yuan ($48 billion) in 2020, which will be three times what it was five years back, Statistica, a global market tracker shows.
Zuoyebang is a different version of Baidu, which is China’s search engine. It had been discovered by the former Baidu executive Hou Jianbin. The company had started five-years ago and provided live-streaming classes along with study from home services which has brought on 170 million monthly active users throughout the country. According to the company, on an average day, a minimum of 50 million students use this platform.
New funding with help Zuoyebang is on par with competitor Yuanfundao, which is backed by Tencent Holding and Hillhouse Capital. It had reached $15.5 billion in value by October once it had gone through two round of funding which is worth $2.2 billion.