Online music education platform VIP Peilian announced IPO is on the way, either in the second half of 2020 or the first half year of 2019, said its founder, Ge Jiaqi (葛佳麒).
So far, VIP Peilian has achieved average daily sales of CNY 5 million and completed a sales volume over CNY 50 million in the first 10 days in July, with predicted paid users in 2019 exceeding twice of the total paid users in the past three years. Ge Jiaqi announced the figures at the signing ceremony with the renowned Chinese concert pianist Lang Lang as music ambassador.
Chinese education market is extremely large with categories ranging from K12 education, pre-exam, professional training, pre-school education, English training, improvement workshop, international education consulting, etc.
Music instrument training is a sub-area in the education market. According to Ge Jiaqi, the penetration rate of music learning is only 5% to 9%, which decomposes to 30% for tier-one cities, and 8% in tier-two cities, but only 1% for tier-three cities and suburban areas, while the number is about 40% to 50% for western countries such as the US, Canada and Germany.
Education is a seemingly saturated market, while new-comers never failed to find new niches. Founded in 2015, VIP Peilian focuses on the less focused stage, self-practicing part, in the instrument learning area. It targets the pain point of most Chinese parents, just as the Tiger Mom Amy Chua, who pressure their children to achieve high-level proficiency in instruments learning. This social status makes instrument practicing not just for fun but to improve kids’ competency in their later stage. Therefore, Chinese parents would likely to have every stage of the learning process to be supervised by professionals, including the phase when their children practicing at home.
While music training is highly customized services, VIP Peilian regards itself as a platform for students and the instrumental professionals, and therefore the product could be highly standardized. It provides a platform for users on both sides in this music training vertical, connecting families with kids at 5 to 16 years old as paid users and many young music professionals from music conservatories as trainers. Training of Piano, Violin, Accordion and Guzheng provide about 70% to 80% revenue of the company.
Seemingly saturated enough, this new vertical has attracted many newcomers, including Kuai Peilian（快陪练），Xiongmao Peilian (熊猫陪练), Youzi Lianqin (柚子练琴)、 Yuedong Meiyue（美悦钢琴）、Dayanjing Peilian (大眼睛陪练). VIP Peilian is the top player in the market.
So far, VIP Peilian has closed five rounds of financing, with investors including Bluerun Ventures (蓝驰创投), GSR Ventures(金沙江创投), Tencent Holdings (腾讯)， Tiger Global Management (老虎环球).