According to the official WeChat account of China Renaissance (华兴资本), Hetao, one of China’s leading children's programming education firms, has raised a Series B round of financing worth USD 50 million. This round of financing was jointly led by Hillhouse Capital (高瓴资本) and China Renaissance with UMF (众源资本), WE Capital (微影资本), Source Code Capital (源码资本) and XVC. The added funds will raise the resource levels and expectations for the startup considerably.
Hetao will use CNY 150 million to develop AI teaching products and make technology upgrades over the coming year. It is worth mentioning that this round of financing is currently the highest amount in China’s children's programming education sector.
Du Yongbo, (杜永波) managing partner of China Renaissance said: “Children’s programming education, as the core track of quality education, is in a stage of rapid development. At the same time, the post-80s and 90s parents have an immersive perception of the outbreak of artificial intelligence and its impact on life. With time, more and more parents are recognizing the importance of programming education for their children. We are optimistic about Hetao’s AI + real person teaching model because the firm’s content is very suitable for AI teaching which can fulfill the demand of high-quality teachers in the field. In terms of paid students, Hetao can be considered as the industry leader. In addition to the model, it has strong competitiveness in research, products, services, branding, etc. We believe that Hetao will continue to be the market leader, with its excellent founding team.”
One of the strongest reasons for raising huge amounts in just two years may be the strength of the firms founding team. The founder and CEO of Hetao, Ceng Pengxuan (曾鹏轩) graduated from the University of Pennsylvania with a major in education and has many years of experience in the education industry. Co-founder and CTO Wang Yuhang (王宇航) won the "ROBOCUP" which is considered the world cup of robotics.
Since its establishment in August 2017, Hetao's students have been assembled from more than 30 countries including the United States. Over the same period, the number of students has exceeded 650,000. In the summer of 2019, the annual revenue exceeded CNY 100 million, and the student repurchase rate climbed over 91%.
The firm has raised a total of four rounds of financing over two years. Both the financings raised in 2018 are still undisclosed. In February this year, the firm raised its A+ round of financing, worth CNY 120 million; it had to wait just over eight months to raise USD 50 million B round.
According to FirstInsight prior to this, a total of 14 financing events took place in the coding education sector during the first three quarters of 2019. If Compared to the same period last year the number of financing has dropped by 19.
Coming back to the fundraising, Ceng Pengxuan (曾鹏轩), the founder and CEO of Hetao said that his company always seeks to "inspire the learning ability of Chinese children," and insists that AI promotes the balanced development of education. "Six to 12 years is the golden period for cultivating children's thinking and cognition. With reasonable technical means, we hope to provide a personalized learning experience for every child."
He further talked about using the financing raised to deepen the teaching research and work towards spreading the word about the importance of children's programming education.
In recent years children's programming education sector has been very hot. Even with a low capital environment, quite a few programming education companies managed to raise funds over CNY 100 million, such as Codemao, XiaoMaWang and Xigua Chuangke. However, the current children's programming track is still in the early stages of development, there is a lack of quality teachers, lack of standardization of the curriculum system and a couple of other major issues.
Lack of teachers is one of the shortcomings that restrict the development of children's programming industry. The personnel engaged in children's programming education must be outstanding talents. They must understand programming and have a solid foundation in the field of children's education.
Although the concept of AI has passed, the application of AI in the field of education has been paid attention to and favored by many people. Only time will tell if it can actually solve the problems of the education industry.