On January 23rd, 2019, Zhangmen 1to1 Completes Series E-1 Financing of USD 350 Million. It made the first financing amount record in 2019 among K12 online education institutes.
Books and a backpack. Photo: Aaron Burden on Unsplash
On January 23rd, 2019, Zhangmen 1to1 (Zhangmen 1Dui1, 掌门1对1) Completes Series E-1 financing of USD 350 Million. It made the first financing amount record in 2019 among K12 online education institutes. The financing round is co-led by CMC (China Media Capital, 华人文化产业基金) and CICC Alpha (China International Capital Corporation Alpha, 中金甲子).
The last funding round of Zhangmen 1to1 was closed in December 2017 with a financing amount of USD 120 million while being valued at USD 1.2 billion according to itjuzi.com. With a rough estimate, the latest market value of Zhangmen 1to1 will sit between USD 3-4 billion.
Zhangmen 1to1 is an online K12 education institute providing 1-to-1 tutoring service. Since its series D financing, Zhangmen 1to1 cooperated with SenseTime (商汤科技) to develop a ICPE system (Intelligent Classroom and Personalized Evaluation system). The system could employ SenseTime’s facial recognition technologies to analyze the facial expression from tutor and student sides and reflect the outcome of provided tutoring service. The combination of AI tech and education scenario was fresh at the time, but there is no afterward follow-up related to how ICPE improves the tutoring service and the contribution to the revenue. As the most shining star in AI technology industry, SenseTime’s cooperation guaranteed the technological part of ICPE system but users care more about how capable the ICPE is in K12 online education scenario.
Online education is an emerging market in China. According to Deloitte’s China Education Development Report 2018, online education occupied 9.32% of the total education market, which size was CNY 2683.6 billion (USD 394.6 billion). In 2020, the expected education market size would reach CNY 3362.4 billion (USD 494.5 billion) and online education’s share would increase to 10.41%; the K12&STEAM education would also have an increase from 37.1% in 2018 to 44.7% as expected in 2020 in online education market.
The growth of the education market is a result of policy encouragement, demographic reasons, economic growth and so on. Along with the abolishment of One-child Policy, the population might welcome a baby wave, which will be the essential drive for education market growth for the coming decade. Besides, the Ministry of Education of the PRC encouraged privatized education development, and online education as a component of privatized education structure is hence benefited.
Worth to mention, the official document Opinions of the General Office of the State Council on Regulating the Development of Off-Campus Training Institutions (The Opinions) released in August 2018 aims at regulating tutoring facilities for K12 students, and online education organizations as a supplement to physical tutoring institutes are also under the regulation. A previous article published on EqualOcean.com said that Yuanfudao (猿辅导), a unicorn online K12 education company, terminated its VIP 1to1 service. Zhangmen 1to1 as a featured 1to1 tutoring service provider may encounter some restrictions after government implementing the regulation. Since there is no operational adjustment released, Zhangmen 1to1 might be in a sound place from the regulation perspective. According to its official site, Zhangmen 1to1 has over 10 million registered users and covers more than 600 cities with a teaching force over 10,000.