Non-public convertible securities issued to Ascendent (上达资本), a private investment firm focused on Greater China-related investment opportunities, with a strong track record in the education sector, will be converted into ordinary shares of NetDragon education in the future and the conversion price will be calculated based on the valuation of the firm. This strategic investment is a part of a wide-ranging collaboration between the two.
Vice-Chairman of NetDragon Liang Nianjian (梁念坚), said: “We are pleased to be a financial and strategic partner of Ascendent. We believe this investment will further promote our development in Asia and create a global online learning community.”
The funds raised will be used to support the company’s product development and growth strategies, as well as potentially funding or acquiring educational firms.
Leon Meng, Chairman and Chief Executive Officer of Ascendent, commented, “We believe in the vision and capabilities of NetDragon’s management team to pursue innovative education technology solutions and to improve the overall learning environment for students, teachers and parents around the world. We look forward to fully leveraging Ascendent’s experience and expertise in the education sector to assist the Company in reaching its next stage of development.”
Founded in 1999 by Liu Dejian, NetDragon is based in Fuzhou, China. It also has offices in Hong Kong and California and is best known for online multiplayer games. In an industry dominated by Tencent Holdings and NetEase, it ranked 25th in terms of turnover in 2018.
NetDragon education’s flagship product is 101 Education PPT, a digital teaching tool that comes with course resources, images and animations. It has been installed 2.3 million times in 31 provinces, according to the company’s 2018 interim report.
Last year NetDragon announced its collaboration with Pearson Education to jointly launch Longman Plus, a one-stop intelligent education solution in Hong Kong.
According to a recent EqualOcean article 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 is expected to creep over 50% by 2022.
In recent years NetDragon has ventured into the online education market not in China but globally. It has evolved into a global company by acquiring Promethean which is a teaching solutions provider, along with Edmodo, a global education network, and an educational software company named Jumpstart. All three are leading companies in their respective fields.
According to South China Morning Post, it is also spearheading the Binhai Education Village, a 400-hectare seaside compound in Fujian province. The initiative is also part of the Belt and Road project.
The long-term goal is for the education village to become a hub of institutions and education technology companies. So far, NetDragon has poured CNY 3 billion into its development.