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Analysis EO
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Analysis EO
Jul 5, 2020 11:26 pm ·

H1 2020 at a Glance: China's Online Education Industry Boom

Businesses in many physical industries have been affected by the COVID-19 pandemic, but the catastrophe has also provided new opportunities for the development of many online industries, as well – one of which is the online education industry. China's online education market has maintained steady growth over the past five years. The COVID-19 epidemic in 2020 has brought new vitality as it boosted demand. It is expected that China's online education users will reach 309 million by the end of 2020. Due to traditional face to face education coming to a halt at the start of the year, online education has witnessed an explosive growth. Students from all over the country started online classes at home. Some of the leading K12 online education firms took the opportunity to announce the provision of free courses during the outbreak, allowing them to gain a maximum number of users.  Talking about K12 online education firms, Yuanfudao set a new record with a staggering USD 1 billion financings in March. Following that, Zuoyuebang, another online education firm, nabbed USD 750 million for its series E round, becoming the second-highest valued edtech unicorn in China.  From celebrity endorsements, naming various popular online variety shows to placing small video ads on Douyin, Zuoyebang, Yuanfudao, Youdao and other head K12 online institutions have been working hard to prepare ample ‘ammunition’ to meet the upcoming summer enrollment season. Other than K12, vocational and quality education tracks saw their popularity increase with Tencent and 58 other firms investing in related companies. Let's use the data to see what was happening in the domestic education venture capital market throughout the first half of the year. According to statistics collected by EqualOcean from ITJuzi, in the first half of 2020, there are 10,640 companies in the field of Education. Of these, 60% had no investment, 28% were invested in and the investment question is not clear about the remaining 12%. In the industry, the angel round stage accounted for the largest proportion of 37%, followed by the A round stage, accounting for 31%. As can be seen, a large number of companies are still in a very early stage, because it is a result-oriented industry. The product's effectiveness needs to be verified and observed over a long period of time.  As 2019 broke, we were all warned of China’s forthcoming ‘capital winter’, only to wake up in Q1 to mega-rounds from Zhangmen (USD 350 million), DaDa (USD 255 million), Andela (USD 100 million) and opening Q2 was Coursera’s USD 103 million Series E. 2H 2019 saw the surge continue with mega-rounds from Knowbox (USD 150 million), ByJu’s (USD 150 million), VIPKid (USD 150 million), Zhihu (USD 434 million), Ruangguru (USD 150 million) and Guild (USD 157 million). Little did we know what 2020 would bring. COVID-19 and way too many video calls later, 1H 2020 has marked a resurgence in mega-rounds, averaging a USD 100 million round per month. In the space of six months, EdTech has it’s very own giant (that didn’t come from China or the US), Yuanfudao has set a new high water-mark with a USD 1 billion round and ‘mainstream’ investors are venturing to learn more about the future of education, the role of technology and the opportunities to participate in that growth. In the first half of 2020, 112 investment events occurred in the Chinese education industry;, the number of transactions fell by 32% month-on-month and 45% year-on-year. The total amount involved was CNY 19.6 billion, an increase of 15% year-on-year. ; The decline in the number of financings in the field is obvious, but the total amount of financing has risen, and the average amount of single financing has also increased by 77% year-on-year to CNY 175 million. Over the past three years, the activity of CNY funds in the field of education investment and financing has been significantly higher than that of USD funds. The number of CNY transactions accounted for more than 90%, and the transaction finance accounted for about 55%~62%; but in the first half of 2020, the total amount of CNY transactions substantially declined and the total amount of USD transactions exceeded CNY transactions for the first time, accounting for 77%. Talking about the amount of funding in the first half of 2020, out of the 112 investment events, the largest number of transactions were in tens of millions of yuan. 19 firms raised more than CNY 100 million, with a total financing amount of CNY 15.7 billion, accounting for 80% of the total financing. Now we should dig deeper into the firms which actually boosted their financings in the first half of 2020. We have short-listed the top 10 education firms with the highest amount of funding raised. These firms are backed by the likes of huge investors such as Tencent, IDG, Sequoia, Temasek etc.  As far as the sub-sectors are concerned, quality education dominated the number of financings with 26, which only totaled CNY 1.3 billion. K12 education showed its dominance, with 18 investment events adding up to CNY 12.4 billion.  As the largest subdivision track in the field, K12 Education has always attracted capital. In the first half of 2020, K12 Education’s financing amount accounted for 60% of the entire industry. Yuanfudao’s new round, worth USD 1 billion, was the main reason behind it. It was followed by the highest single amount of financing in the field; in June, the Zuoyebang completed its E round of financing, worth USD 750 million.  Other than that, listed Chinese edtech companies have shown their strengths as well. NetEase Youdao released its Q1 unaudited financial report which showed the firm has achieved a steady growth for a fifth consecutive quarter. Another US-listed firm, GSX Techedu, has been a hot topic. Its financial results have been found too good to be true for some US research firms. The Chinese online tutoring company has been shorted as many as 10 times in the first half of the year but the stock is showing no signs of weakness – instead, recently it hit the highest ever amount since it was listed.  With Edtech companies such as Yuanfudao (猿辅导), Zuoyebang (作业帮) and Xueba (学霸君) suddenly catching the limelight and seeing this as an opportunity, major Internet companies have stepped up their efforts in the online education track as well.  Alibaba (BABA: NYSE) launched a product called 帮帮答, directly translated to ‘help me answer.’ It is a paid question and answer platform for primary and secondary school students for academic problems. This is the first independent product launched by Alibaba in the field of education. Zhang Yiming, the founder of the world’s most valued unicorn, ByteDance, expressed his intention to consider and plan for a new strategic direction towards education in a letter released on the eighth anniversary of the company. “The online tutoring market has been very hot recently, and many people ask about my company's business progress. In fact, I am not anxious and have patience. I think it is still very early. The education business must have more fundamental innovations, of course, provided we have a deeper understanding. Especially for a company that already has a successful business, starting a new business is not easy. Bold attempts in new fields are an important part of starting a business.” Zhang said. It is evident that the epidemic has created a window of opportunity for huge tech giants to enter the education industry – but at the same time firms which are already are in the business have stepped up to prove the strength and advantages of online education. By providing free online classes, companies such as Yuanfudao, GSX Techedu and Zuoyebang gained millions of users.

Analysis EO
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Analysis EO
Jan 22, 2020 02:29 pm ·

Online Education Investment Landscape in China & US

The US economy is experiencing an upswing. In 2019 the Dow Jones Industrial Average passed 28,000 points, the S&P 500 Index topped 3,000 points and the Nasdaq broke 9,000 in what some have termed one of the longest bull markets in history.  Since the beginning of 2020, Chinese education firms such as TAL, New Oriental, Genshuixue, 51Talk and Netease Youdao have all seen their stocks rise. Among them, New Oriental rose 11.96%, TAL rose 12.07% and 51Talk rose 47.76%. This article observes global online education development trends from a macro perspective to give a much more comprehensive understanding.  Vocational training track grabs attention in the US According to data published by EdSurge, a research firm centered on educational technology in the United States, in 2019 investment in educational technology companies reached above USD 1.6 billion (about CNY 14.4 billion). The run involving 105 transactions, which is the highest in five years. The amount of financing increased by 16% as compared to the previous year, even with five fewer investment events. A total of 332 financing events took place in China’s education industry with the total amount of financing reaching around CNY 20 billion. Out of the total 148 events that took place in the online education track, with a total financing amount of CNY 11.56 billion. It is not difficult to see that online education in China and the United States is very similar in terms of financing scale and quantity. Funds have been pouring into the US education technology industry during the past year, which is largely mirrored across the wider venture capital landscape. A CB Insights report puts US venture capital investments at USD 108 billion across 5,906 deals in 2019, the third-biggest year ever by value. Employers in the United States are seeking third-party agencies to help them recruit top talent or train talent among existing employees. Stimulation of uncontrollable economic factors has created a talent recruitment market where employers are looking for help.  The unemployment rate is at a low level of 3.6%, which is a rare number in the period since 1969; this low level may be caused by people giving up job applications, resulting in a lower labor force participation rate, making it difficult for employers to recruit suitable talent, reported EdSurge.  The eight most important edtech deals in 2019 involved companies that provide training services to employers and employees, often focusing on training them to ensure their qualified retention or an internal promotion. The eight companies are Guild Education, BetterUp, Coursera, Andela, Degreed, MindTickle, EdCast, and A Cloud Guru, which account for 39% of total education technology investment in 2019. Jenny Abramson, founder and CEO of Rethink Impact venture capital firm, said the employee training programs “are becoming table stakes for anyone who wants to run a company with great talent.”  Data from iResearch shows that the revenue of Chinas’ online education industry exceeded CNY 300 billion. It may be estimated that by 2022 the scale of the market will surpass CNY 540 billion, with industry insiders predicting that the track will produce a unicorn soon.  Morgan Stanley’s survey report analyzes that China’s K12 online education market will grow 23 times in the next 10 years which makes investors around the world confident about investing in the sector. The table below shows that Chinese companies that provide teaching services in K12 related fields and their combined investments exceed CNY 1 billion. However, K12 online education companies in the US do not have a broad financing record. Except for ClassClassjo, an app used by schools for communication, which received USD 35 million from GSV ventures, and Newsela, an instructional content platform that supercharges reading engagement and learning, which raised a Series C round worth USD 50 million in March 2019. We can see that, as compared to China, the K12 education market in the US is declining. Quite a few of the companies are being acquired. We should also note that K12 education has lost its position to STEAM education in terms of number of companies attracting capital.

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Nov 18, 2019 02:08 pm · EO company

Depth: VIPKID financing suspension accident and story

Analysis EO
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Analysis EO
Sep 26, 2019 11:05 am ·

Will Online Replace Traditional Offline Education?

2013 became the era of mobile+education, with easy access to smartphones, live-streaming classes, and education Apps. Let us take a look into the trend.   The Internet Education Research Institute recently released the ‘China Children’s Online English Education Industry Research Report 2019’ (in Chinese). According to the report, the online education market for children in 2018 exceeded CNY 21 billion (USD 2.9 billion), while the number of users reached 6.25 million. It is expected that this number will exceed 10 million this year. With the increase of public awareness, the penetration rate of the online education industry is growing, and it is expected to creep over 50% by 2022. It is believed that traditional offline learning modes will be almost completely replaced by online mode. Children’s online English market polarization is obvious, with four enterprises - VIPKID, 51Talk, DaDa(哒哒英语)and vipJr - occupying more than 90% of the market share. The online education penetration rate is believed to increase year-by-year beyond 2022 Due to favorable policies from the government such as the ‘Two-Child’ policy, the population of 0-14-year-olds in China has increased each year, and the potential demand for English for children has exceeded 230 million, providing a broad market space for online English education firms. If compared with other services such as online videos, e-commerce and online payment the penetration rate of online education is quite low.   According to iResearch, the revenue of China’s online education market reached CNY 251.76 billion in 2018, which was estimated to grow at a rate of 16%-24% in the following years. The growth rate might see a downshift but will have a steady rising momentum. The rising acceptance level for online education among users, enhanced online service payment, willingness and improvement in the online learning experience, are the main reasons for the steady growth of the online education market. Online English education is a market of USD 18 billion, where 70% of the total revenues come from children’s English training. Parents want their children to be fluent in both reading and writing when it comes to English, and that aspiration is driving the market.  There has been an increase in the adoption of smartphones and other mobile devices in China, which is pushing the growth in the market. The increased per-capita spending capacity of the Chinese population and the flexibility in online education offerings have been key to driving the online market. Training programs conducted by native English-speaking teachers can be availed of easily through the online medium. The advantages of online learning have gained more recognition from the parents over the recent years. Data shows that the online learning market for children in 2018 was as high as 26.59%, way higher than the average online penetration rate of the education industry overall. The Internet not only brings high-quality foreign teacher resources to Chinese families but also saves a lot of time for both parents and children. Therefore, parents are more inclined to choose online learning for their children. It is expected that the penetration rate of online children’s English education will exceed 33% in 2019. International authoritative teaching materials are more suitable for Chinese children The strength of teaching and research is the foundation of an educational platform. At present, the mainstream firms mainly target the common English curriculum standards and provide matching courses for children of different ages and different abilities. The textbooks used by leading firms are mainly divided into original textbooks and self-study textbooks. Most of the companies choose to introduce original textbooks. However, due to cultural differences and difference in learning environments the authoritative textbooks are most suitable for Chinese children. Children aged 6-12 are becoming the main force in online learning The data shows that children aged 6-12 are the main driving force of online education, accounting for 71% of the total users. Children above 12 and under six account for 15% and 14% respectively. From the perspective of geographical distribution, most of the online education users are concentrated in tier 1 and tier 2 cities such as Guangzhou, Shenzhen, Hangzhou, and Nanjing. With the growth of the Chinese economy, the awareness of parents about online education in second- and third-tier cities is increasing, hence the willingness to spend on such education is rising too.  Online education industry relies heavily on ‘word-of-mouth’  The survey found that ‘word-of-mouth’ is the most important channel for users to understand the brand. The results show that 71.40% of the firms are introduced to customers by their friends. The education firms spend a lot of money on advertising which only amounts up to 42.86%. In order to ensure ‘word-of-mouth’ referrals, it is necessary to solve the real needs of the user such as the quality of teaching.  Online Education is the main sector where most of the new investments have taken place in China. Companies like, VIPKID, Zouyebang, Yuanfudao, etc., have raised millions of dollars.  Educational companies in general yield good profitable business models with stable cash flow based on prepayment and a strong gross margin generated by high added-value, new products brought by technology make the industry attractive for the capital market. With the continuous development of network technology, mentioned above, the penetration rate of online education has been rising, from less than 2% in 2013 to 15.2% in 2019. With the advent of the 5G era, the growth of online education will shape the coming years; it is expected to exceed 50% in 2022. China's online education is mainly divided into higher education, vocational education, primary and secondary education and other categories. At present, the main body of the market is adult education. This is because adults generally have strong self-control and relatively clear learning objectives. However, in the long run, considering that Chinese parents have high expectations for the growth of their next generation, they have given great importance to education very young ages.  In other news on sub-sectors of the education industry, vocational education is the sector currently supported by government policies – such as a shift to emphasize vocational education as mentioned in an article written by EqualOcean recently.

Analysis EO
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Analysis EO
Aug 19, 2019 11:10 am ·

Education Industry has a Bright Future Regardless the Drop in Funding

Back in the day’s education used to be simple with a blackboard, a teacher and desks in a classroom. Today, students can study various languages online, upload homework through a portal and learn chemistry through 3D immersion. Such is the rise of educational technologies.  Government support for education per capita in developed countries is far higher than in developing countries, which can be explained by both the resourcefulness of developed nations and the high and growing populations of developing nations. Technology is becoming one of the most important tools for education Education institutions are investing more in software solutions than in technology hardware. M-learning, Bring Your Own Device, “gamification” and virtual reality are gaining popularity and enabling teaching to be student-centered, while lectures are becoming project-and inquiry-based. According to Holon IQ education is a USD 6 trillion industry and will grow to USD 8 trillion by 2025. Expenditure on education and training from governments, parents, individuals and corporates continues to grow to historic levels and is expected to reach USD 10 trillion by 2030. The investments made to learning technology companies in 2018 were massive, soaring past USD 16.34 billion with 44.1% going to Chinese edtech companies. 2018 marked the first year that the US did not dominate the funding. In 2018, USD 7.22 billion went to 207 Chinese edtech companies. USD 5.23 billion (32% of all global funding) went to 248 US companies. Compared to the US, the funding amounts in China were huge. American education technology companies were dwarfed by Chinese counterparts. Chinese educational technology companies included VIPKID which raised a staggering amount of USD 500 million and Zouyebang (作业帮) managed to raise an amount of USD 350 million. The most noticing point in 2018 was the investors interest in AI-based Learning startups. Learning products with integrated Artificial Intelligence dominated the investment rounds. A combined total of USD 2.90 billion went to 197 companies developing AI-based Learning products across the planet in 2018. "AI-based Learning is the one area where the US still has a commanding lead over China," said Sam S. Adkins, Chief Researcher of Metaari. "The majority (61.5%) of all global investment in AI-based Learning companies went to 102 US-based companies that raised a combined total of USD 1.78 billion. In stark contrast, USD 299.7 million went to just twelve Chinese AI-based Learning companies, a mere 10.3% of all global investments to AI-based Learning companies. In 2018, 25 AI-based Learning companies in India obtained USD 227.7 million in investments, followed by Israel at USD 169.5 million." There was a sharp increase in investment in game-based learning companies in 2018. A total of USD 2.25 billion went to 133 game-based education companies in 2018, more than double the amount invested in the year earlier. Over USD 1.96 billion went to 74 mobile learning companies in 2018. This investment was heavily concentrated in four Chinese companies including Zuoyebang (作业帮) and 17 Zuoye (一起作业).  Education technology is becoming a global phenomenon, and as distribution and platforms scale internationally. A report by EdTechXGlobal in 2016 said that the market is projected to grow at 17.0% per annum, to USD 252 billion by 2020. The US has set the trend and pace of the EdTech market. Asia is now experiencing the world’s fastest growth in investment into the sector, and Europe has seen increases; however, this region remains a largely under-invested and fragmented market. According to Elearning Inside, in 2018, Chinese investors poured USD 3.3 billion into edtech while American investors invested USD 1.7 billion and their European counterparts spent USD 0.7 billion.  In 2014, European investors only poured USD 70 million into edtech in 87 transactions. By 2018, this amount has risen to USD 449 million across 152 transactions. A report by Brighteye Ventures emphasizes “Europe is the only region where EdTech deal volumes have grown, nearly doubling from 87 to 152 since 2014.” During the same period, transaction volume dropped by 30% in the United States. It can be seen from the data above that China is clearly leading the race in the first half of 2019 when it comes to the amount and number of investments.  USA runners-up in the race of raising funds EdSurge reported that for the first half of 2019, the industry saw USD 962 million raised across 65 deals, the highest amount of funding at the halfway mark since at least 2015. By comparison, in the first six months of 2018, companies raised USD 750 million across 62 deals. The leading deals worth more than USD 200 million were made by two US companies. The California based online learning platform provider, Coursera raised USD 103 million in a Series E round. New York-based Andela, which trains programmers in developing countries managed to raise USD 100 million in a Series D round. These two deals make up for 21% of the total amount raised by edtech companies in USA for the first half of 2019.  USA’s counterparts overseas have also attracted plenty of venture capital. Three Chinese companies landed nine-figure Series D deals. Two that offer online tutoring services, Dada (哒哒英语) and Gaosi Education (高思教育), raised USD 255 million and USD 140 million, respectively. Online homework platform Knowbox raised USD 150 million. China has led education VC investment growth over the past five years According to EDU Insight a total of 167 financing events took place in China. Other than the undisclosed amounts, a total of CNY 9.29 billion of investments were raised. As compared to 342 investments and financings in the first half of 2018, the amount has shrunk by nearly half. Although the investments have decreased, the sub-sector has changed rapidly. Art education, children's programming, and other fields have received much attention in terms of financing. As the country continues to incorporate sports, art and other disciplines and comprehensive quality evaluation into performance evaluation standards, and the gradual opening of the after-school service market, 2019 Quality education will continue to attract investments in the second half of the year, and competition will get intense.  In the first half of 2019, there were 36 investment and financing events in the K12 education field. Out of the total financing of CNY 9.291 billion, K12 contributed CNY 5.826 billion, accounting for 63% of the total amount. The top three of the investments raised also belong to the K12 companies, with Zhangmen (掌门1对1) raising a staggering amount of USD 1 billion for E round, DaDa ABC (哒哒英语) and Gaosi Education (高思教育) both raising D round financing of USD 255 million and USD 140 million respectively. However, education is starved of capital compared with other sectors. Innovation requires capital. Governments are struggling to fund education to previous levels and education is not drawing on enough private capital to fund the innovation that’s needed. Public-Private Partnerships will be critical to supporting future growth, innovation and access to education. Education as an industry that has pinned the hopes of hundreds of millions of families around the world for a better life, social progress, and national rejuvenation, education has undoubtedly been one of the areas of greatest concern to people all over the world. EqualOcean has sorted out the list of "The Global Unicorn Club" released by CB Insights, and compiled 382 unicorn companies from July 2010 to July 31, 2019, consisting of around20 industries.

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Analysis EO
Aug 15, 2019 10:04 pm ·

Edtech Squeezes its Way into the Unicorn Club

Education as an industry that has pinned the hopes of hundreds of millions of families around the world for a better life, social progress, and national rejuvenation, education has undoubtedly been one of the areas of greatest concern to people all over the world. EqualOcean has sorted out the list of "The Global Unicorn Club" released by CB Insights, and compiled 382 unicorn companies from July 2010 to July 31, 2019, consisting of around20 industries. In terms of industry distribution, ranking first is the Internet software and service industry with 53 unicorn companies. Major industries such as e-commerce & retail (48), fintech (46), and health (32) have begun to take shape, and 12 unicorn companies have emerged in the education field. EqualOcean has analyzed and explored various industries. This article will conduct an in-depth study of "Educational unicorns", focusing on educational brands in China and the United States, from the perspectives of valuation, establishment time, founders, countries, and time of inclusion in the unicorn list. In terms of quantity, there are only 12 unicorns in the education field, accounting for 3.1%, which is equivalent to the number of unicorn enterprises in the tourism industry. From the valuation point of view, there is no super unicorn in the education field, and most of the companies have just joined “The Global Unicorn Club”. Among the 12 companies, nine are from China, far exceeding the United States (2) and India (1). With six female founders/co-founders, education has become the industry with the highest proportion of women After compiling the information about the 382 global unicorns which has always been a male-dominated entrepreneurial battlefield, but now there are more and more women breaking into the successful entrepreneurship, even though the current field founders/co-founders is still a minority. With 10 female founders/Co-founders/Ceo’s E-commerce & retail is on top, while the education industry is behind it with a six. In terms of proportion, education industry is the industry with the highest proportion of women in all fields. Among the 12 educational enterprises selected, there are 24 founders, among which six are women, accounting for 25%. Mother is probably the most powerful title a woman could ever have. Women however are a powerful and gentle force in the education industry. EO Company has recently written an analysis article on “The Rise of Women's Power in the Education Industry.” In a competitive industry these women are shaping a new era and bringing better education to their children. Technology is the key to the rapid rise of enterprises There is a contradiction between the demand for education and the supply of high-quality resources. It seems that it may be solved by technical means. By organizing the information of these 12 educational unicorns, EqualOcean discovered that the innovation of technology and the model is the key to the rapid growth of these enterprises. Most of these unicorn companies were founded in around 2013. This year, the unprecedented combination of mobile Internet and education has promoted the historic upgrade of the education industry. The influx of Internet traffic into the education sector has brought about structural changes, and a number of online education companies have gained a chance to grow. When we look at the model, the online education model is in favor, and most of them have been transformed through technology. Whether it is the reconstruction of the K12 education stock market, or the upgrading of vocational education, quality education etc., the development of technology is indeed the key.   However, unlike other industries, the education industry is relatively difficult to get transformed by the Internet. At present, there is no change in the teaching process, enterprise income model, and operation in the field of education. In the era of artificial intelligence for the future, veteran players must transform themselves, and new players will also be poised to push competition to a new dimension. The intelligent education represented by AI has stood on the doorsteps of the education circle. On August 31, “The World Artificial Intelligence Conference-EO Company Forum” will further analyze the opportunities in the intelligent education represented by AI. BAT (Baidu, Alibaba, Tencent) actively take part in the educational industry   If we look behind these 12 educational unicorns, we can find three familiar figures: BAT’s capital players. As China's top technology companies, Baidu, Alibaba and Tencent have layouts in various industries, and the education field is one of them. Even though education companies may not bring huge income to the Big Three, BAT has been promoting the education industry through investment.  We can see that among the three Tencent invested in the most unicorn companies. It not only invested in domestic unicorn companies like VIPKID, Yuanfudao (猿辅导), and Dedao (得到), but also injected capital into the Indian education technology company BYJU'S, which is also the world’s most valuable education company. Indian education unicorn shines bright The scarcity and uneven distribution of educational resources seems to be an important problem that plagues all countries in the world. From the perspective of geographical distribution, the education unicorn is almost occupied by United States and China. There are 11 unicorns in the two countries, accounting for 90% and the remaining one is from India.  Founded in 2008 and headquartered in Bangalore, India, BYJU'S offers courses for students of grades 6-12, as well as exam preparation courses for JEE, AIPMT, CAT, IAS, GRE and GMAT. With a personalized learning experience, an emphasis on application development, and a vast amount of teaching content, Byju's has received investment support from well-known companies such as the charity foundation created by Facebook founder Mark Zuckerberg and the Chinese technology giant Tencent. Among the Indian unicorn companies, BYJU ranks fifth in valuation, just below e-commerce company Flipkart, online payment company Paytm, budget hotel brand OYO and taxi software application Ola. In education, BYJU'S is currently valued at more than USD 5 billion and is one of the highest valuation educational technology companies worldwide.  

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Analysis EO
Jun 25, 2019 09:57 am ·

Decryption of VIPKID’s Expansion Logic

Different from the past few years, the dust nearly settles in today’s English online education for children in China. With an absolute majority of market share, VIPKID has left far behind its competitors like DaDaABC and 51Talk. On June 11, VIPKID was recognized by Forbes as one of the “most innovative enterprises in China”. What makes VIPKID stand out from other competitors? EO Intelligence, an industry and technology research institute, employs six attributes - teacher resources; course design; teaching materials; marketing; customer acquisition; price strategy - to assess the potential for companies in the industry of English online education for children. VIPKID aces especially four of these attributes. According to VIPKID, it has employed more than 70,000 English teachers from North America, who are certificated by well-known organizations like TESOL and TEFL. The number of English teachers is considered to be one of its core advantages. Speaking of the teaching method, the company mainly adopts one-to-one mode - the most effective mode in online learning. Besides, VIPKID spares no effort in advertising and promoting. Firstly, the company chose popular actress Liu Tao to be its image speaker because of her good-mother image. In family, the mother is usually the one to make consumption decisions on children’s education. Secondly, the company encourages parents to share their children’s learning achievement in WeChat by bonus courses. Word-of-mouth communication is the most efficient channel to acquire new customers. Moreover, an indispensable factor for VIPKID’s success is the support of many famous investment institutes such as MatrixPartners China (经纬中国), Sequoia (红杉资本), Sinovation Ventures (创新工场) and so on. When the other factors are similar, who holds the most capital will swallow the biggest market. Conversely, the bigger market holder will attract more investment. Besides, the company’s occupation of the market reinforces consumers’ belief in the brand, leading to a dominance. But VIPKID has not achieved the dominant place in the market as they expect. As its rough expansion mode (raising money for massive advertisement) can be duplicated, the company’s position doesn’t have enough defense capacity if huge amounts of money choose another favorite. Furthermore, VIPKID’s profitability has always been questioned. The high CAC (Customer Acquisition Cost) probably takes the company a year or more to recover. Although the company claimed it will make a profit in 2022, it still risks going bankrupt before its CAC goes down. To keep its leading place, VIPKID ought to put more attention to its biggest advantage - the teacher resources. The company had been criticized for quite a time because of its insufficient cancellation chances. For a contract of 6 months, there are only 6 cancellations. The pay raise policy is also a severe problem. A teacher can only get a raise after a year, and each class is worth USD 0.5.  After all, The number of good teachers is always limited, but one teacher can only serve on a student at the same time with one-to-one mode. Surely the pace of VIPKID will slow down someday unless it lowers the threshold of admission, yet this means the loss of competency. In the near future, VIPKID may pour more money in increasing the exposure in overseas, especially social media like YouTube. But considering the cost performance, maybe to preserve present teacher resource by all means is the utmost need of the company. Founded in 2013, VIPKID has developed with rapid growth. After its Series D+ round of funding, VIPKID surpassed all his competitors, occupying the majority of the market. As the company declared, it possesses more than 500,000 subscriptions in 63 countries at present. Actually, VIPKID isn’t one of the first players in this industry. In 2006, several brands like Likeshuo (立刻说), e2say (一线口语) have already come out. However, the English online education market didn’t prosper until 5 years later, and VIPKID entered the industry when this model was becoming mature. Now the company has begun the overseas business. Corresponding to English courses facing the domestic market, Lingobus, set up in 2017, provides courses for foreign children to learn Chinese online. It is a mirror project of VIPKID itself because the learning process, the teacher admission regulations are nearly the same. The founder Cindy Mi (Mi Wenjuan, 米雯娟) claimed: “Our ideal is to make Chinese children understand the world and the foreign children understand China.” Nevertheless, when reflecting on the nature of this overseas business, we can easily find out it is just another expanding. The Chinese market is becoming more and more saturated and the company has to turn to the outside. In fact, the company can’t stop itself anymore because the choice is either to expand either to die.

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Jun 19, 2019 07:09 am · EO company

Can VIPKID take over New Oriental, Good future?

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May 16, 2019 02:20 pm ·

EO Company Releases List of Top 30 China Education Innovation Enterprises

ZHANG Fan (张帆) , vice president of EO company and co-founder of EqualOcean – the sister publication of iyiou.com – released the list of "Top 30 China Education innovation enterprises" compiled by iyou.com on May 15, 2019 at the Grand Millennium Beijing Hotel. The summit was held under the auspices of iyiou.com with the theme of "GIIS2019 China Education Industry Innovation Summit." It saw an attendance of 1,000 and consisted of 16 keynote speeches and 2 roundtable forums. Based on the theme of "New Innovation," the summit features the agenda to analyze future trends and seeks to better integrate/align the aspects of policy, idea, science, technology and capital in education industry. Members from representative companies, investors, scholars and officials working in fields including K12, STEAM education, early childhood education and vocational training were present among the attendees. They shared their experience, thoughts and suggestions regarding the industry. In light of the market situation, the list highlighted six major trends in early childhood education, STEAM education, K12, foreign language training, vocational training and education service provision. The list also selected five innovative and representative companies for each of the six trends. They are as follows: EO Education evaluated enterprises on the following five dimensions: • New developments in the past year, innovations in technology, product iteration, business model development and so on.  • Growth rate in all dimensions (from the time of its establishment until now), such as the number of employees, user growth rate, performance growth rate, revenue growth and so on. • Brand influence in the form of Baidu search index, WeChat search index and other media dimensions for grading. • Number of financing rounds. Basically Series A round of financing and above plus the amount of financing, and investors. • Founders' backgrounds. Recognized by the industry, with ability to lead industry development, professional background (Internet+Education), educational background and so on Importance of the five dimensions mentioned above is indicated by percentage: 35% for new developments, 30% for growth rate, 20% for brand influence, 10% for financing and 5% for the founders' backgrounds. Iyiou.com has compiled this list over the course of two months by taking into account organization applications, multi-dimensional examinations, expert ratings and assessments and various other criteria.. It was decided at the summit that innovation can drive the development of the industry, from "Internet+ Education" to "AI+ Education." Technology innovation is constantly challenging the traditional teaching methods, promoting more even distribution of educational resources and improving the personalization of education resources. Through innovation can we continue to identify and solve educational problems, promote positive development of education and help education keep up with the pace of social changes in the world. Whenever new technologies leave their mark on the industry, we can see that most leading education institutions and investors would pounce at the opportunity. This shows educational enterprises' thirst, said Fred Zhang. He added that the change that technology brings to education is only one aspect of educational innovation. Innovation is one of the core competencies of educational institutions of this era. It is not a chase of some quick bucks, but a bet on the future, namely, on the next decade. China’s education industry has long been a favorite for capital investment. Companies with viable business models, stable cash flows and strong margins generated by tech-powered, high valued-added new products have turned the industry into a magnet for the capital market. Since 2014, education companies have been on the receiving end of investments to the tune of hundreds of billions. As far as the number of deals is concerned, STEAM education, vocational education and early childhood education were the top three recipients of funding in the first six months of 2018.

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May 9, 2019 07:38 pm ·

Is Artificial Intelligence Advanced Enough to Replace Teachers?

Let us first briefly talk about the situation of China’s education industry in 2019. A total of 131 financings took place, a decrease of 14.94% compared with the same period of last year and the total financing amounted to CNY 12.512 billion, an increase of 2.44% compared with the same period last year. It is worth noting that the “2019 Q1 Education Industry Investment and Financing Data” published by Jingmeiti shows that, in the first quarter, 85 early round financing accounted for the highest proportion which reached 65%. The sectors to have received the most number of funding were K12, STEAM education, and other online educational institutions. According to iiMedia, the online education market in China reached CNY 251.76 billion in 2018, a year-on-year increase of 25.7%. It is expected that the market growth rate will remain between 16% and 24% in the next three to five years. It is estimated that by 2020, the number of online education users in China will further reach 296 million, and the market size will reach CNY 433 billion. The trend of Education+AI  Last month, at the "Education+AI" event, a number of educational entrepreneurs, education technology company CEO, CTO, investors discussed the future development trend of "Education + AI" and the current application scenarios. The combination, influence, and future of education and AI. Exploring new tools, new technologies, and new models in the field of education is to find effective ways to meet the general educational needs of Chinese students on a large scale. Xiaoping XU (徐小平), the founder of ZhenFund (真格基金), talked about the reason why he is optimistic about "Education+AI":  "Like e-commerce solves the problem of shopping, new energy vehicles solve pollution problems, and AI can realize the fairness and modernization of educational resources. And internationalization, and most importantly, it can help children get the ultimate personalized education." Xu Xiaoping believes that at present, the AI trend has come, although it seems to be relatively early, within two or three years, a giant may be born. The continuous maturity of AI technology has created a new opportunity for educational entrepreneurs. Victor Wang the co-founder of Zhenfund said, “Education has never changed in the past ten years or even a thousand years. The emergence of AI has subverted traditional education and various forms and contents.” In recent years, global AI-related topics have continued to heat up, and “Education+AI” has become one of the most discussed and most optimized tracks. Some people predict that the market of "Education+AI" will explode in the next three to five years. Parents, educators, and psychologists have been long debating on the topic of the limited amount of screen time children should have, the integration of artificial intelligence and machine learning is starting to change education tools and institutions and in fact the whole education industry. It is expected that artificial intelligence in U.S. education will grow by 47.5% from 2017-2021 according to the Artificial Intelligence Market in the US Education Sector report. Even though most experts believe the presence of teachers is irreplaceable, there will be many changes to a teacher’s job and to educational best practices. Artificial Intelligence spends in the education industry in China has increased at 69.4% during 2018 to reach USD 53.3 million. Over the forecast period (2019-2025), spend on AI is expected to record a CAGR of 25.3%, increasing from USD 79.4 million in 2019 to reach USD 383.9 million by 2020, according to ResearchAndMarkets. At first Artificial intelligence was only limited to measurements and such small activities, then it started to push through to increase the learning efficiency of the students and now it is helping teachers with their teaching method and as well as the teaching content. AI is trying to make education more personalized and change the mainstream method of big class education, but not only in the back end system voice but also through cartoons, pictures of robots and as well as through an image of a real teacher. The Chinese government has made AI-enabled education a national strategy, a part of an AI development road map that aims to make the country a global center of AI innovation by 2030, according to a government plan released by China’s State Council in July 2017. Technological innovation is culturally important to China. This is evident in its education system, where primary and secondary schools teach AI courses in classrooms and technology companies like Squirrel.AI are building personalized learning platforms with AI. As a leading global center for AI innovation, China will remain an exciting market for the foreseeable future. AI investment and solution deployment show no sign of slowing down. Global collaboration will continue to drive breakthrough outcomes for consumers and businesses around the world. Although AI in the education industry is an infant, some education entrepreneurs in China believe the innovative technology is already smart enough to teach, or at the very least lend a hand. Beijing-based VIPKID is an English-language education platform that connects students in China to teachers in the USA and Canada through online classes, helping almost 600,000 Chinese students receive additional education each week. CEO Cindy Mi says that VIPKid’s AI teaching assistant allows classes, and even homework, to be personalized to each student, helping capture the pupil’s attention and drive their performance. Due to its AI-backed software personalization is done at low-cost, helping students vault one of the major barriers to education. “The goal is to create a class where equity and access are not a privilege,” Mi states. Liulishuo also is known as LAIX, an education company headquartering in Shanghai, is improving access to education as well, by providing an education service to China’s rural areas. But unlike VIPKID, Liulishuo doesn’t provide AI-assistance to human teachers; instead, it uses AI to create completely virtual educators. CEO of Liulishuo Wang YI, despite his company’s emphasis on artificial tutors, says that “I think we will always need teachers, but I think AI teachers will play an increasingly important role across the board.” AI Investments in China China may have also surpassed the American historic advantage in venture capital investments. One report from China suggests that in the first half of 2018, Chinese venture investments many of which involved AI were higher than in the U.S. Data from 2017 suggest that Chinese AI firms received more venture funding than U.S. companies. In 2018, 21 investments’ funding amount exceeded USD 100 million each which resulted in 19 companies getting into the 100 million club. Ant Financial and SenseTime are the only two companies which received two investments each over USD 100 million in 2018. In Chart 3, the companies are ordered according to the amount they raised in 2018. In these 19 companies, Automobile is the category with the highest frequency. There were three AI education companies in 2018 which received more than USD 100 million. According to ITJUZI in 2017 Education had emerged as one of the hottest verticals for the application of AI in China. It ranked third after medicine and automobiles among industries that had witnessed the most changes brought on by AI. According to the South China Morning Post, the investment in Chinese AI-focused companies now accounts for nearly half of all global AI funding. Earlier last year, 17zuoye an edtech company which directly translates to “Homework Together” reached unicorn status after raising USD 250 million in a round of investment led by Temasek Holdings. 17zuoye software streamlines the homework distribution and grading process and uses AI algorithms to suggest areas of improvement. VIPKID has said that they will be using a big part of their latest USD 500 million Series D+ funding for development of AI instruction. They already use AI algorithms to determine learner engagement. GETChina Insights estimates that Chinese edtech companies raised an incredible USD 842 million in the first quarter of 2018 alone. In 2018, Tencent and TAL invested 4 times. Tencent's investment in AI track included K12 after-school training, language training, and STEAM education. It shows its comprehensive layout in the field of “AI+ education” is: Education informationization, K12 after-school training, language training. In terms of financing amount, in addition to the two undisclosed funds, 80% of the financing amount in the “AI + Education” field in 2018 is more than CNY 100 million, and most of the financing amount is concentrated in CNY 100 million to 500 million. How big of a change can AI bring to Education? From the beginning of the research on the application of AI in the field of education, there is an overwhelming prediction that the development and application of artificial intelligence technology in education will make a profound change in education. However, today, this huge change is still very hard to see. According to the survey data provided by CCTV Finance, by the end of 2016, there were more than 400 online education-related enterprises in China, most of which claimed to be AI oriented. 70% of these more than 400 companies faced losses, 10% remained stable, only 5% of the companies were profitable, and 15% on the verge of bankruptcy. In the past two years, the number of enterprises has grown, and this phenomenon is becoming more and more obvious. AI+education comes with burning money. Some professionals say that many of the “AI+ education” on the market today are not really “AI+ education”. At present, "AI+ education" products are immature, but some companies, as long as they have some functions similar to evaluation or identification, they directly claim to be an artificial intelligence company. AI has already been applied in education that help students develop skills and teachers with testing systems. As AI+education continue to mature, AI can help fill needs gaps in learning and teaching and allow schools and teachers to do more than ever before. AI can drive efficiency, personalization and streamline admin tasks to allow teachers the time and freedom to provide understanding and adaptability. By bringing together the best attributes of machines and teachers, the vision for AI in education is one where they work together for the best outcome for students. The purpose of AI+ education has always been to serve people, to liberate people from simple, mechanical, and burdensome work. The most important purpose of artificial intelligence for education should be to allow teachers to free up more time and energy, to innovate educational content, and to reform teaching methods, which will be more helpful to children's growth. Let us take Koala reading as an example. The company raised USD 20 million in August last year and uses AI to help Chinese students with their Chinese language reading lessons. Koala relies on independent research and development, it has created China’s first quantitative Chinese grading reading system “ER Framework”. By the use of AI, the system detects the difficulties each student's faces and creates a reading course according to their reading levels to provide personalized reading content and language learning solutions. AI+ education can be subdivided into different sectors, such as K12, language training, vocational education, and many other specific educational fields. No matter which field, the market in China is very popular, especially the English language training and K12 education. No matter how advanced technology has become, Artificial intelligence cannot replace the role of a teacher. The ultimate goal of education is to educate people. The profession of teachers is not only to impart knowledge but also to invest in emotions, use their own ideas and experience to guide students and help students grow. AI can provide customized and personalized educational resources. It can easily help teachers to correct homework and test papers. Artificial intelligence can indeed assist education, but it is impossible to completely change the structure of education. What artificial intelligence brings to education is the change of methods and methods of teaching. AI+ education ultimately needs to return to the content of education itself, focusing on cultivating students' curiosity, creativity, and adaptability.

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Analysis EO
May 6, 2019 04:15 pm ·

Will AI Teacher Change the Structure of Education Market?

At first Artificial intelligence was only limited to measurements and such small activities, then it started to push through to increase the learning efficiency of the students and now it is helping teachers with their teaching method and as well as the teaching content. AI is trying to make education more personalized and change the mainstream method of big class education, but not only in the back end system voice but also through cartoons, pictures of robots and as well as through an image of a real teacher. Liulishuo is a company which has adopted the full-on AI teacher and has been listed in the US. Since its listing, the word “AI teacher” has been a hot topic for every other listed education company. At first Artificial intelligence in the education, the industry was only limited to measurements and such small activities, then it started to push through to increase the learning efficiency of the students and now it is helping teachers with their teaching method and as well as the teaching content. The Chinese government has made AI-enabled education a national strategy, a part of an AI development road map that aims to make the country a global center of AI innovation by 2030, according to a government plan released by China’s State Council in July 2017.   Jingmeiti has compiled a list of Education company representatives and their views on the AI teacher topic. AI teacher is not a real human being and has no emotions, will the students feel a bit distant? The founder of Squirrel AI, Derek Li (栗浩洋) says that there is no denying the AI teacher has a huge gap between its perception and a real person. However, if we talk about the distance of students, we can actually compare them. In a class first is the teacher and the second thing is the textbook. So as far as the textbooks are concerned AI teacher centered companies have animated letters and numbers. So if compared to a traditional offline class the AI class is better in all aspects other than the real teacher.  Qu Zhu Qifeng a founder of another AI is driven language teaching company, Kouyu100, says, the removal of this sense of distance requires a rich variety of user interaction designs, not just artificial intelligence technology. On October 14, 2018, seventh birthday of Kouyu100’s AI teacher “Aryn”, she received more than 2 million students giving her virtual flowers and thousands of student birthday sending her birthday cards. The relationship between students and teacher is very important even after years, students tend to remember the companionship of the teacher. To achieve this goal it requires a variety of designs. For example, Aryn uses an animated design, a variety of humane personalities, an interesting, encouraging language, as well as various expressions and body language. At present, products mainly include AI synthetic image, animation IP, and live video. Which image is more suitable for AI teachers, and why? In addition, for the AI teacher, is it 1 on 1, more suitable or 1 to many? Derek Li (栗浩洋) said that education should be one on one at the end. Most of education is still one-to-many. This is because there is no way. Just as China’s transportation was mainly by bus and train decades ago, everyone’s traffic is a one-to-many form. One-on-one is the ultimate form of the highest efficiency of education. It is also the best solution for AI education to reduce costs significantly and combine high-quality and scarce educational resources. Qu Zhu Qifeng replied to this question as: the most important thing in teaching is personalization which can only be achieved by one on one classes. The artificial intelligence teacher and the student's relationship is the in one-on-one classes, it is personalized and completely aimed towards the student's weak points, this way one can achieve the best teaching results.  The product manager of VIPKID LIN Chenbin (林陈斌) on this topic said that From the perspective of cost and experience maturity, animated IP and live video are more suitable for k12 education. The animation IP is especially suitable for small and low-level students, that is, students in the third grade of elementary school; live-action videos are suitable for small high-level users. How does the AI teacher's teaching process meet the needs of students? Because English teaching is a process that requires continuous and immediate interaction and feedback, the role of the teacher is particularly important. The most important thing is to fix the teaching methods and communication habits that teachers and children develop in primary language teaching. The teaching effect of AI teachers has been recognized all over the world. Whether it is the man-machine war in America or the man-machine war done by squirrel AI in China. It has been proved that the effect of AI+education is better than that of senior teachers and teachers of special grade. This is also borne out by a large number of years of long-term teaching studies in the United States and China, two or three years in which the level of AI education has far surpassed that of human teachers, Said Derek Li, the founder of Squirrel AI. He further added that the Ministry of Education’s website has a conclusion that AI will not replace the teacher, but teachers who do not use AI will be replaced. In fact, this is illustrated. I also hope that everyone will overcome the state of technological advancement from the real teacher to the AI teacher as soon as possible. We have found that technological advancement has changed our lives in all walks of life, and we only need to find more ways to adapt to it. Lin Chenbin, VIPKID’s project manager, on the other hand, says that AI teachers have three major advantages.  • AI teacher can master the data in the classroom in a large amount and in depth through various sensors. • Using AI one can make correct feedback for each student individually. a human teacher can only give feedback based on the student's pronunciation and that too in a one on one class. The AI teacher can do it for each student in the class at the same time.  • AI teacher has a richer personality, especially AI teachers developed by giants like TAL and New Oriental have multiple expressions such as cute, teasing, funny, etc., to attract the attention of students.   AI teachers can further break through the imagination of the students, and constantly attract the attention of the users by introducing animation and designing various atmosphere effects, thereby attracting students' attention and improving learning efficiency. Are the current AI's technical reserves not enough to support the teaching application?  In the AI field, technology is divided into three categories: one is a technology that has matured and is already used on a large scale, and is very reliable. For example, face recognition has been widely recognized and used in airport security and bank verification, and its reliability is far more than human level. The second category is speech recognition. In the field of speech recognition and shorthand, the level of AI has now reached a level of widespread use. The third type of mature AI technology is a smart adaptation technology. All of AI's smart-adapted education companies have more than 20 million users in the United States and more than 80 million users worldwide and are already a very mature system. This is a typical upgrade to education through technology, said Derek LI. VIPKID’s representative said, “It depends on our expectations of AI. We (VIPKID) never think that we need to completely replace the entire teaching task with AI. We hope to respect the teaching rules, fully understand the advantages of AI, partially replace and even optimize the online teaching links under the premise of ensuring the teaching effect. Therefore, we (VIPKID) put forward the concept of "AI teaching assistant" and "AI learning partner". LIN further added, First of all, you can't break away from the essence of teaching, you can't take the lead, you don't need to deliberately introduce high-tech and cool skills. The premise of a good AI class needs to be a good lesson. This requires an in-depth study of all the elements that a good class needs to have and preserves the various teaching links in the course as much as possible to ensure the delivery of teaching results. In this process, we use AI technology and product expressiveness to carefully polish and optimize each small link.

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May 5, 2019 12:04 pm ·

VIPKID has its Eyes on the Ever-rising STEAM Education Sector

Competition between English teaching and coding companies is quite tough. Though the market of English training has been around for a while whereas the idea of STEAM education is comparatively new. The number and amount of investments in the English teaching industry have been steady and the investments in STEAM education industry are growing. VIPKID has taken a different approach to the situation. Understanding the future of STEAM education industry the English teaching Unicorn has made multiple investments in STEAM education-oriented companies. STEAM education service provider Code Planet (代码星球) recently announced that they raised CNY 10 million in its angel round of financing, jointly invested by Sequoia Capital, VIPKID and Ameba Capital. Until now VIPKID has invested in a total of three education companies with Code Planet being the second company related to STEAM education. Earlier this year VIPKID invested in Delta Math, math education and Training Institute serving the K12 sector. Recently reported by EqualOcean Math Planet (迈思星球), and Onion Math (洋葱数学) announced their financings. Math Plant raised an undisclosed amount predicted to be in millions of dollars and Onion Math raised USD 45 million. The investment in Onion Math was led by Primavera Capital Group and followed by Kunlun Tech, taking the total investment value to approximately CNY 600 million (USD 90 million).  Code Planet was founded in September 2017 and was awarded the seed round financing in July 2018. Code Planet is a young children's computer education platform dedicated to 4-6 years old online small class teaching. The platform integrates technology research and development, curriculum system and teaching services. According to the official website, the code planet course is divided into four categories: children's programming, graphical programming, internet design, and computer science. It adopts two modes: double-teacher class and online live small class. In less than two years of its existence, Code Planet has covered kindergartens and primary schools in various provinces of the country, with over 1,000 cooperation’s with kindergartens, particularly in the early childhood sector. After two years of curriculum development and polishing, after two years of curriculum development and polishing, the products have been tested and iterated on the market and now Code Planet has a well-established curriculum system for all ages, from early childhood to middle school, and is fully online. The investments in STEAM education are increasing year by year, with favorable policies from the government and the awareness of the parents. According to estimation by Deloitte's in August 2018, China's education market will reach CNY 2.68 trillion by the end of 2018 with training organizations, K12 & STEAM education, and private kindergartens being the three biggest segments. The total scale of private education is expected to reach CNY 3.36 trillion by 2020 and close to CNY 5 trillion by 2025 with a CAGR of 10.8%. China’s education industry has been a favorite for capital investment. Education companies having good profitable business models with stable cash flow based on prepayment, strong gross margin generated by high value-added, and new products brought by the technology make the industry attractive for the capital market. According to iResearch Consulting Group, the revenue of China’s online education market reached CNY 251.76 billion in 2018 with a YoY growth of 25.7%, which was estimated to keep a growth rate of 16%-24% in the following 3-5 years. The growth rate may decline but will have a steady rising momentum. China's education industry has been highly valued for its significance policies, consumers and capital and under its expansion phase in terms of industrial scale and market activity. According to estimation by Deloitte's in August 2018, China's education market will reach CNY 2.68 trillion by the end of 2018 with training organizations, K12 & STEAM education, and private kindergartens being the three biggest.

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Analysis EO
Apr 25, 2019 07:56 pm ·

The Trend of STEAM in China’s Education Industry 

China's education industry has been highly valued for its significance policies, consumers and capital and under its expansion phase in terms of industrial scale and market activity. According to estimation by Deloitte's in August 2018, China's education market will reach CNY 2.68 trillion by the end of 2018 with training organizations, K12 & STEAM education, and private kindergartens being the three biggest segments. The total scale of private education is expected to reach CNY 3.36 trillion by 2020 and close to CNY 5 trillion by 2025 with a CAGR of 10.8%. In recent years, China has introduced the STEAM concept to cultivate and integrate innovative talents and has gradually become a fashion. The survey data shows that STEAM education has a more efficient performance in terms of creativity and participation in literacy. K12 education has developed for a long time in China and has formed a certain scale. With the development of AI technology, more innovative technologies will penetrate into the online education field. Applications such as big data and cloud computing can better address the needs of educated people and provide refined teaching solutions. In recent years, some segmentation circuits have been hatched in children's education, which is not only favored by parents but also attracts the large-scale entry of capital. Among them, STEAM has become a popular choice. As early as 2016, the Core Quality of Chinese Students Development put forward the idea of gaokao reform. The University entrance exam will pay more and more attention to the overall skills of students, not just the scores. According to data released by Meituan Dianping (美团点评) Education Department, from 10 April 2018 to 9 April 2019, the courses that users bought most were: Music, Fine Arts, Foreign Languages, Vocational Technology, and K12 STEAM. STEAM has become a new hot spot in education. Educational Giants promoting STEAM  TAL (好未来) As early as 2012, TAL education laid out its study plan which included STEAM, board games, etc. TAL’s STEAM sector currently includes companies such as FirstLeap, focusing on mathematics, science and English, Mobby, Iqidao, Xueersi, which teaching programming to children, and ABCtime. In the past, it has invested in STEAM education institutes such as Drosophilia academy, 61draw, a fine arts institute and Aomeng another institute which focuses on coding lessons for children. New Oriental (新东方)   As another giant in the education industry of China, New Oriental also established a brand of quality education and a development strategy for 3 to 12 years old back in in 2015. It has since cooperated with other institutes promoting STEAM education. Baixuehui, a brand established by New Oriental for the growth of STEAM education, has laid out 5 education complexes in Beijing according to relevant reports. VIPKID Although VIPKID focuses on English teaching but has cooperated with SSAT (a standardized verbal, mathematics and reading skills test used by admission officers to access the abilities of students seeking to enroll in an independent school). Zhangmen (掌门一对一) Al the end of last year this K12 focused 1 on 1 teaching mastermind also declared itself STEAM oriented Technology Company and released a sub-brand of STEAM oriented education. In terms of investment, many well-known investment institutions such as Zhen fund, Sequoia Capital, BlueRun Ventures, etc. are very active in the field of STEAM education. Many startups related to STEAM education have received huge investments.  STEAM previously known as STEM without the integration of arts stands for Science, Technology, Engineering, Arts and Mathematics, has a relatively mature development system in many countries. The USA has launched the “Hour of code” campaign to show that anybody can learn the basics of coding. With a slogan of “Do not just play on your phone, program it.” The development of the AI field, the popularity of the programming industry, the shortage of social human resources, and other multiple factors have become the main driving force for the cultivation of technically advanced talents. One of the distinguishing features of STEAM education from traditional education is the application of high technology. Different from the traditional offline classes, parents in first and second-tier cities prefer to choose such an education.  At present, the more popular open source programming tool Scratch and the first domestic children's programming language Kitten have become new toys for many children. With the development of mobile internet, programming learning is not limited to the PC, but now can be done on mobile phones, tablets, etc. For example, Lego's “WeDo” suite has further developed robotics courses. As Compared with Traditional Education, STEAM pays more attention to children's thinking education and quality education, which can arouse children's learning curiosity and sense of achievement from more levels, stimulate children's potentialities in science education and cultivate their thinking ability. Children's training usually consists of three sections: content, teachers, and community. What the enterprise ultimately delivers to the user is a complete set of products and service programs. At present, the industry has not been formed completely, and various companies are also in the stage of polishing products and enriching customer experience. The official market battle has not yet officially begun. STEAM is still in the early stage of development in China, and the industry scale is close to CNY 10 billion. The children's programming market is about CNY 3 to 4 billion with a user scale of 15.5 million, and a penetration rate of about 1.5%. iResearch predicts that the market for children's programming will grow to CNY 30 billion in the next five years, achieving a tenfold increase. As a growing sector of China’s education industry STEAM education is expected to exceed the scale of the CNY 100 billion markets in the future. The shortage of high-end talents has promoted the rapid penetration of STEAM education Taking the information technology industry as an example, the total amount of talent resources in the information industry in China has reached 10.5 million. Among them, the electronic information industry is 9.13 million and the telecommunications industry is 1.37 million. There are 790 employees in the information technology industry per 100,000 population. According to international experience, a reasonable software talent structure should be a pyramid shape with blue-collar technicians at the base, software engineers in the middle and high-end software structural analyst on the top and a ratio of 6:3:1. The proportion of talent structure in China's IT industry is about 7.2:2.4:0.4. The proportion of middle and low-level talents is too large. The high-end talents are still short, which limits the expansion of the industry and the overall level. In 2018, China's overall market size of artificial intelligence reached CNY 33 billion. The Ministry of Industry and Information Technology predicts that by 2020, China's artificial intelligence will drive the related industries to exceed CNY 1 trillion. Some industry analysts believe that a personalized teaching model based on big data and artificial intelligence will become the most potential area for future education. In addition to policy orientation and talent demand, capital empowerment also provides good support for the development of the STEAM industry. The education giants follow the trend and actively expand their business scope. They have gathered a large number of high-quality education enterprises at home and abroad, and have laid out STEAM education from the early stage. In 2018, there have been more than 160 children's programming companies, of which about 50 have been publicly financed. As mentioned above well-known investment institutes have been active in the industry.  According to ITJUZI, there are currently over 200 children's programming startup projects and companies on the market as of 2018. Post 90’s parents have become the driving force of STEAM education Due to the relatively late start of domestic STEAM education, the audience is relatively young. The parents mainly post 80-90’s, and the opening of the second child policy has promoted the development of STEAM education from the other side. The education concept of parents in the new era is forward-looking and pays more attention to STEAM education. In China, there is a natural correlation between education level and consumption ability of the parents. Under the macro background of consumption upgrading, the current parents' willingness to invest in education has increased with the increase in income. Quality education is expected to usher in the consumption dividend period.  Nowadays, there are so many kinds of STEAM toys on the market. Many parents can't help cutting off their hands when they see the word "STEAM". They think they can cultivate their children's scientific thinking if they buy it back home. With the opening of the second-child policy, the growth of the population of the age-appropriate population has also promoted the development of children's science education to a certain extent. STEAM education, which is the comprehensive ability of children, will also usher in development opportunities. At present, there are fewer STEAM courses in the school, which are caused by several reasons, the professional teachers are not enough, and the traditional courses are saturated. Policies promoting STEAM education The in-depth implementation of STEAM education requires the participation of all social forces. Governments, enterprises, universities, research institutions, schools, and social groups all contribute from different perspectives to build a collaborative and innovative science education ecosystem. In the past two years, STEM education has been incorporated into the national strategic development policy. The 2016 National Science Literacy Action Plan Outline Implementation Plan (2016-2020), which is issued by the State Council, emphasizes that in the high school stage, it is necessary to encourage the exploration and development of scientific innovation and technical practice. In 2017, the Ministry of Education issued the Compulsory Education Elementary Science Curriculum Standards, advocating interdisciplinary learning methods, and suggested that teachers can try STEM education in teaching practice. In the compulsory education stage, there are strict regulations on investment in teaching and research and development. Relatively speaking, the process of promoting STEAM in schools (mainly public schools) is relatively slow, mainly driven by policies. At present, STEAM education is mainly based on off-campus education. More and more parents are beginning to realize the importance of STEAM education. With the offline education industry getting mature by each day, the systemization of off-campus training is gradually improving. The role of University/college entry examinations At the end of 2017, Zhejiang has clearly included the information technology discipline (including programming) into the examination subjects of the college entrance examination, followed by Beijing, Shandong and other major provinces and cities. Nanjing Education Bureau has also included programming in the scope of the University Entrance Examination. All of this indicates that the outbreak of the programming industry seems to be only a matter of time. According to reports, in the past year, at least 33 children's programming investment and financing events occurred, in which Codemao (编程猫) raised CNY 300 million in its C round of financing and CNY 120 million raised by Ao meng coding (奥梦编程) in its round B. There are still many problems in the industry that need to be solved urgently. Many restrictive development factors are still in the exploration stage. STEAM education may need to wait for a suitable opportunity.  Though familiar with the concept, parents in China have no idea what STEAM education exactly means. They are fully aware of the importance of comprehensive ability for their children, but living in a society of exam-oriented education, few parents can balance the exam-oriented education and STEAM education.  For STEAM education in China, the only role that society plays is public opinion. There is no linkage between the communities and enterprises as in other countries. At present in China, scenarios of STEAM education are only at school and at home. Children from lower-tier cities with their parents having less income have only one chance to make it big which is to pass the gaokao (university entrance exam) and get into the best universities. They would want to spend more time and energy to prepare for the courses related to gaokao. With parents nowadays paying more and more attention to the children's overall quality, and the Ministry of education encouraging steam education, which is slowly moving into schools as part of the school curriculum, the development of STEAM education in China will hasten in the near future. 

Analysis EO
Analysis · 2
Analysis EO
Apr 18, 2019 07:53 pm ·

China’s Education Industry On The Rise, And This Is Just The Beginning

With the change in Chinese population and its class in the domestic market, education consumption is playing an important role in China’s household consumption, due to which Chinese education market is on the rise and developing with rapid acceleration. In 2018 Deliotte had predicted that due to many factors such as favorable policies, an eager capital market, etc. the market of private education will grow to CNY 3.36 trillion. Eight education companies went public from January 2018 to August 2018 in the U.S and Hong Kong. By the end of June 2018, 137 deals were made in the industry, with the amount of total financing of USD 2.57 billion, exceeding that of the whole of 2017.  China’s economy is growing at a very high rate and at the same time, China as a country is globalizing. Chinese parents are willing to spend more money than ever on their children as their expectations rise and they are happy with the new foreign educational system and teaching methods being integrated.  The education industry is being affected by the commercial factors and the inflow of capital, these companies will have to ensure market growth, expand and improve management without compromising their core competitiveness and quality of education. Hence lots of opportunities with challenges will rise for the industry players, in the future. Reasons for the Boom in China’s Private Education Industry  Early childhood education has risen due to the implementation of two-child policy which brings sufficient demand and the government's policies to encourage preschool education; the growth of K12 extra-curricular training is attributed to the demand increase resulted from the pick-up of the school-age population. Meanwhile, the desire for further education and international education also drives the demand for K12 examination-oriented education and language education; personal training grows because of better economic capability and higher willingness to improve competitiveness, Deloitte reports. There are three key, long-term themes in the Chinese market that influence consumer behavior: demand for international education, an increase in online adoption and affluence driving demand for premium products. With almost 1 million Chinese students choosing foreign institutions, international education is a priority for the Chinese parents.  In 2018 China exceeded the USA in terms of education innovation and technology investment by approximately three to one. Just 10 companies have absorbed half of this funding. Online models are proliferating, and Chinese consumers, who bring an “online first” mentality, are willing to engage with education products, reports L.E.K.  The quality and feasibility of Chinese private education are improving day by day, driven by an increasingly urban, and cosmopolitan population. Choosy Chinese education consumers are premium preferring and internationally minded. The Chinese education sector is highly competitive, with 9.4 million students sitting each year for the gaokao (university admission exam) and C9 universities selecting as few as 50,000. Parents will spend to get an edge, generating hyper-competition from pre-primary school. According to iResearch Consulting Group, the revenue of China’s online education market reached CNY 251.76 billion in 2018 with a YoY growth of 25.7%, which was estimated to keep a growth rate of 16%-24% in the following 3-5 years. The growth rate may decline but will have a steady rising momentum. The rising acceptance level for online education among users enhanced online service payment willingness and improvement in the online learning experience and effects are the main reasons for the steady growth of the online education market. Higher education and vocational education have long been the main part of China’s online education market and took up almost 80% of the market. Given that adults usually have stronger self-control ability, clearer study targets, limited spare time and fixed vision, they are the main customer group of online education nowadays, and their demand for education is particularly strong in the scenarios of pursuing a higher education background, searching for a job and preparing for a certification exam. Four hot sectors in the Education Industry   Primary and secondary online education such as homework tutorials, vocational schools, and English education. Prominent companies include 17ZuoYe (一起作业), VIPKID, Yuanfudao (猿辅导), and ZuoYeBang (作业帮). Test-oriented education focusing on examinations such as CET-4, CET-6, TOEFL, IELTS and Civil Services Examinations. Some large organizations are Koolearn (新东方在线), GEDU (环球雅思), and Offcn Education (中公教育). Vocational education and skills training including technology, accounting, finance, and other professional skills. Example companies are FenBi (粉笔网), HuaTu Education(华图教育), ChinaACCA (中华会计网校). • English language training In this market of USD 18 billion, 70% of total revenue is from junior training. Parents want their children to be fluent in reading and writing when it comes to English, and that aspiration is driving the market; enrollment in offline, skills-based junior ELT in Tier 1 cities has grown by 25% year-on-year since 2014.  A key factor driving the growth of the market is the growth of the online education market in China. Also, there has been an increase in the adoption of smartphones and other mobile devices in China, which is pushing the growth in the market. The increased per-capita spending capacity of the Chinese population and the flexibility in online education offerings have been key to driving the online education market in China. Training programs conducted by native English-speaking teachers can be availed through the online medium. • K-12 The bilingual K-12 market is large, at USD 2.2 billion across the 15 largest city markets, with Tier 1 cities Beijing, Shanghai, Guangzhou, and Shenzhen comprising 75% of the market and 84,000 enrollments. Beijing and Shanghai are more established markets, where the concept of bilingual education started with senior grades, while Guangzhou and Shenzhen are new markets with a more diverse grade mix. K12 education demand is high, parents are usually worried about online education due to the high trail-and error cost. At an initial stage market share was only 9% back in 2012, but due to the improvements in the education concept among parents (post-90), their rising incomes, children’s familiarity of internet, and the second-child policy, parents and students are More receptive to online K12 education now. iResearch estimates that the share of online k12 education will grow to around 28% in 2022 and share of higher education and vocational education in the online education market might drop to about 68%. • Test prep, tutoring and enrichment  China is the largest TTE market in the world. It has a revenue of CNY 500 billion and has grown at 14% since 2014.  While online provision is still a small segment of the junior ELT market (roughly 10%) according to L.E.T, it is now a key trend. Given consumer perspectives on online education, supporting traditional center-based ELT companies in moving online will be a key opportunity for investors. Premium offline providers remain a strong sub-segment for investors, given that they employ native English speakers and are therefore more resilient and competitive against newer online models offering access to native speakers.  • Higher and Vocational education  China has unveiled a national plan to reform its vocational education system to better prepare its workforce for a more market-oriented economy. The strongest growth since 2013 has been in private vocational education institutions. China’s higher education system is leaned more toward academic-oriented programs. As China pivots toward a service based economy, there is a need for the workforce to be trained to meet these new demands. Investments in Chinese education  According to eduFair China, by 2018, the number of users grew 63% to 179 million and the market value reached CNY 300 billion. It is estimated that these number will further grow with each year and reach CNY 714 billion by 2025.  Online Education is the main sector where most of the investments have taken place in China. Companies like, VIPKID, Zouyebang, Yuanfudao, etc., have raised millions of dollars.  The online education in China took a turn from 2010 with online learning, online communities and MOOC’s became common. 2013 became the era of mobile+education, with easy access to smartphones, live streaming classes, and education Apps.  China’s education industry has been a favorite for capital investment. Education companies good profitable business models with stable cash flow based on prepayment, strong gross margin generated by high value-added, and new products brought by the technology make the industry attractive for the capital market. Since 2014, there has been frequent funding in education. As far as the number of deals in concerned; STEAM education, vocational education, and early childhood education were the top three investment targets in the first six months of 2018.  Statistics from CVSource shows that from 2017 to 3 August 2018, 11 education companies went public in HK, and 7 in the US. With the enforcement of Non-public Education Promotion Law. It is estimated that there will be more companies to go public. However, when it came to large-scale financing in 2018, American education technology companies were dwarfed by Chinese counterparts. Chinese educational technology companies included VIPKID (USD 500 million), Zouyebang (USD 350 million), etc. 2019 Q1 total investments and leading investors A total of 1740 investment events took place in the first quarter of 2019. According to Xiniudata. The most active investors have been IDG capital and Zijin venture capital with 24 investments each. They were followed by Sequoia China (16), K2VC (15), Tencent Industry win-win fund (13), Casstar (13) and Matrix partners China (12).  Before Round B investments totaled 882, accounting 51% of the total investment events. The areas invested in the most were: Corporate services, healthcare, education, and finance.  2019 Q1 investments and leading investors in Chinese education  The data of 2019 first quarter education industry compiled by Jingmeiti shows that 131 investment and financing events have taken place in the education industry. That sums up an average of 1.46 financing per day. The total amount is calculated to be CNY 12.5 billion, which is less than that of the previous year’s first quarter (Q1 of 2018).  As we can see from the graph above that the number of financing events has decreased by 14.9% sent, although the total amount of funding has increased by 2.4 % from 2018 Q1. Now let us take a detailed look at the financing events, total amounts and the funding rounds of 2017 Q1, 2018 Q1, and 2019 Q1.  The amount of late-stage investments in 2017 first quarter is still undisclosed according to the source. In the first quarter of 2019, almost two-thirds of financing events took place using Chinese Yuan, with only a small portion of them being in US dollars.  If we have a look at the investment events that took place in China’s education industry in the first quarter of 2019, most of are in tier 1 cities with Beijing on top, Shanghai and Guangzhou second and third respectively.  The two of the most active investors in China’s education industry in 2019’s first quarter are TAL and New Oriental with 4 investments each. TAL has invested in DaDa, American Education Company: Ready 4, Qintuan, and His Performance Team (HPT). The companies New Oriental invested in are Micro Language, Xueda, ishizh, and Xiaoyang Edu. With all the data and facts mentioned above, it is clear that compared with the same period last year, the number of financing events decreased, but the amount increased by 2.44%. New Oriental and TAL are the most active investors in the education industry with 4 investments each.  The quality of K-12 education still seems to be a concern by the capitals and the investment heat of vocational education is on the rise. Online education institutions are growing at a rapid rate, accounting for half of the large amounts of financing.  

Analysis EO
Analysis · 2
Analysis EO
Mar 10, 2019 05:25 pm ·

How did VIPKID Become a Unicorn in so Little Time

VIPKID is one of the largest online English tutoring companies in China, which has a valuation of around USD 1.5 billion. It matches over 30,000 teachers in North America and Canada with over 200,000 Chinese students of ages 4 to 12. The student retention rate is 95%, and its revenues for 2018 were USD 760 million, up from USD 300 million in 2017. VIPKID was ranked 29nth on the 2018 World’s Most Innovative Companies list and 2nd among Chinese companies. The company was founded in 2013 and officially launched in 2014. It attracted investment from huge names such as Tencent, Sequoia Capital, Sinovation Ventures, Yunfeng Capital, Matrix Partners, Learn Capital, Northern Light VC, etc.  Cindy Mi, the founder of VIPKID, made her mind to help children develop a love of learning from an early age. She had lots of difficulties with school and dropped out in 11th grade, and started the first business with her uncle. They together founded ABC English, English-training company, and Mi herself worked as an English teacher in the company as well. Challenges VIPKID faced  The business did not go smoothly at the beginning. It was difficult to make the parents believe in the efficiency of online teaching at first. Both parents and kids have not been familiar with the learning model; therefore, it could say that Mi was creating an entirely new market. The road got even more challenging when companies like, 51Talk started to recruit many North American teachers right after the sharp increase of VIPKID, but DadaABC, which was founded in 2013, received around 100 million USD in the round C financing from TAL Education Group in Jan 2018. Later, DadaABC partnered with McGraw-Hill Education, and with existing partners Oxford University Press and National Geographic Learning, DadaABC determined to make itself more competitive in the one-on-one teaching area. Challenges VIPKID will face in the future To make a profit, a company such as VIPKID has to scale up. This business model has been questioned about its low salaries, low-profit-margin, and high turnover rate. However, with more students, it has to recruit more teachers, which brings the company higher cost, otherwise, the teaching quality will avoidably decrease. Recently VIPKID has been criticized by the parents, that the teaching quality has dropped from what it used to be. The increasing popularity of the product makes it hard to maintain the same quality level as it does in the past. Another challenge for VIPKID and such companies is that with the fast developing technology translation is becoming easier day by day, when you can just translate ever thing using a small device there is no point wasting time and money taking language classes. But for now, there is still time and room for improvement for technology in this area.  Why is VIPKID different from other online education companies?  VIPKID has three bases: one on one teaching with quick feedback, hiring the right people for the job, and strict teacher criterion. VIPKID regards the quality of education as the top priority. The applications the company receives each month are between 20,000 and 30,000, but 90% is rejected claimed the founder of the company. The research and development team of the company develops its own teaching curriculum to ensure the quality of the study, for teachers to follow it. To be a teacher on the platform, a bachelor’s degree is required, although it doesn’t have to be in the education field. A smoothly-running computer and a reliable Internet is a must as well as a minimum of one year of teaching experience. VIPKID pays its teachers USD 14 to USD 22 (90–130 RMB) per hour, based on performance and consistency. It also provides teachers with courses to help those better tutor students. Teachers are hired on for six-month contracts. They create a profile and upload videos of their instruction on the platform. Parents and kids scroll through the information and read reviews from other parents, and then book open slots for the following two weeks. During the class, the teacher and their student engage in a live video chat for the lesson. Usually, students take the lesson independently, but parents will receive a video recording their kids ‘performance afterward to help them learn the progress their children have made.     Chinese online education is growing day by day and more companies with innovative ideas of combining artificial intelligence and emerging. Soon it will get even tougher for VIPKID to stay on top of the Chinese online education industry.  

Analysis EO
Analysis · 2
Analysis EO
Mar 5, 2019 04:19 pm ·

VIPKid is Revolutionizing Education in China

VIPKid’s mission is to inspire and empower every child for the future. It envisions a global classroom that empowers students and teachers through personalized learning, connection of cultures across the world and the passion for lifelong learning. It believes that education is not one size fits all, rather, all students are unique and the world is within their reach when connected with great teachers capable of personalizing learning and sparking curiosity. Founded in 2013, VIPKID is a global education technology company which connects children with teachers for online English learning classes. It has become China’s leading online education startup, attracting investment from investors like; Tencent, Coatue Management, Sequoia Capital, Sinovation Ventures, Yunfeng Capital, Matrix Partners, Learn Capital, Northern Light VC and Bryant Stibel. The VIPKid platform currently connects over 500,000 paying students with over 60,000 teachers in the US and Canada.  The combination of AI and education is changing everything for the next generation in a positive way. VIPKid has partnered with Microsoft china to concentrate on the use of artificial intelligence in online education by which they will be able to analyze student's behavior while studying and taught accordingly.  Being listed as one the world's most innovative companies twice in 2 years by Fast company, VIPKid is already in a league of its own. The Beijing-based startup raised USD 500 million in April 2018 year with an evaluation of over USD 3 billion and grew its revenue to USD 760 million from USD 300 million in just a year. It reached to over 500,000 students and over 60,000 teachers at the end of 2018 from 3,305 students and 404 teachers in 2015. China, a country which is always hungry to learn has made VIPKid one of the fastest growing startups not only in education technology, in which companies use technology to improve learning, but in all of China. In recent years, the education market has exploded in China along with the country's middle class. The banking group UBS has said the extracurricular education market in China could grow to USD 165 billion in five years. While the English education industry is on the rise, it is still very difficult to find quality English teachers, particularly outside big cities like Beijing and Shanghai. Cindy Mi the founder of VIPKid said that there are only 27,000 qualified English teachers from North America in China, hardly enough for the country's nearly 300 million young people, a report by The Economic times says. As a result, many are turning to online classes like those provided by VIPKid. The online English-tutoring market is expected to hit USD 8 billion by 2019 according to iResearch, a research group focusing on the Chinese internet. In 2019, VIPKid is projecting a near 10 fold rise in students to 2.4 million, and more than 280,000 teachers. Kevyn Klein is VIPKid's US based global director of community. Spending her first decade in the workforce split between the idealism of the nonprofit Teach For America, for which she taught for three years, and the sometimes difficult reality of education tech, where she worked after. As with most companies, appealing to teachers is as important to VIPKid as drawing in new parents and student customers. Today, many competitors, such as 51Talk, DadaABC, and VIPJunior, are competing for the same pool of teachers.  Propelled by favorable policies and capital inflows, the Chinese online education market and user scale will maintain a rapid growth rate. As the younger generation born in the 80's become parents, they have higher requirements on education for children and spend more on education; as the two-child policy is implemented, the number of children in K12-education age group will increase steadily and market demand will further expand. Total downloads of education training apps category in China increased by 72.8% year-on-year while the proportion of downloads to total downloads in app stores grew by 34.1% in April 2018. Online education training is increasing the education quality lower-tier Chinese cities. With the widespread mobile client of education training, to some extent, it helps to solve the difficulties of a lack of qualified trainers in some remote rural areas. Keeping all the above given facts in mind, VIPKid is surely leading Chinas younger generation towards a brighter future by providing them high quality education and guidance.  

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