Prior to this funding which was announced Gaosi education (高思教育) has had 3 round of funding totaling to USD 180 million. The latest round raised in 2017 (CNY 550 million) which evaluated the company at CNY 4 billion. This USD 140 million funding was led by private equity investor Warburg Pincus.
Founded in 2009, Gaosi started out as an operator of extracurricular education centers for primary and middle-school students. In 2014, it shifted its focus toward providing products and services to other extracurricular centers, especially in smaller cities.
It is understood that after this round of financing, Gaosi will open a platform-oriented strategy for the industry, and strive to build a K12 education empowerment platform driven by content and technology. The company also announced a strategic partnership with Tencent Holdings Ltd.’s cloud computing unit to develop technologies for the education sector.
“The fundraising amount is one of biggest in history for educational firms who provide services for corporate clients in the field of K12 education,” founder and CEO XU Jicheng said in a statement on Thursday.
In addition, the company also announced a five-year plan in which it will focus on the OMO (Online Merge Offline) educational settings, teachers, courses, technology, services and other chains related to the industry. This plan covers more than 90% of suburb areas of the country.
According to Caixinglobal, A company spokesperson said Gaosi still operates around 55 centers in Beijing. XU the company’s founder said that the company will not open any centers outside of Beijing and instead develop its role as a service provider. yua
“K12 extracurricular tutoring in China is a promising field that has the potential to grow into a trillion-yuan market,” said Gordon Ding, managing director at Warburg Pincus who specializes in tech-related investments.
The private equity firm has recently been beefing up its education portfolio. In January, the firm led a USD 225 million Series D round in China’s online English tutoring platform DaDa, formerly DaDaABC.
Established in 2013, Shanghai-based DaDa operates an artificial intelligence-powered online-streaming portal that helps K-12 children aged 4 to 16 to learn English from native speakers. It tailors its services to follow an overseas curriculum, partnering with the American TESOL Institute, Pearson Test of English.
Chinese education startups are continuing to pull in massive funding rounds. Recently, Beijing-based online tutoring firm Yuanfudao has raised USD 300 million in its latest round of funding at a valuation of over USD 3 billion.
The funding round was led by Tencent Holdings and joined by Warburg Pincus, Matrix Partners China, and IDG Capital. Chinese online education company Zuoyebang also raised USD 350 million in its series D financing.
At present, the learning platform of Gaosi education has established long-term cooperation with more than 5,000 educational institutions in more than 1,600 counties and cities nationwide. The total number of service students exceeds 12 million.
Online education and edtech are currently one of the fastest-growing industries in China with consumers increasingly willing to spend on both traditional and after-school education to better their children. According to a previous report by UBS Securities, the Chinese e-learning market is expected to grow to over USD 104 billion by 2025.