Beijing-based education service provider, Wanxue Education (万学教育), announced the completion of a funding round Series D worth USD 100 million, led by Hong Kong-based private equity firm ADV Partners, with participation from Beijing-based consult firm Index Capital (指数资本) serving as exclusive financial advisor.
Founded in 2006 by several professors from well-known Chinese universities, including Renmin University of China, Peking University, and Tsinghua University, with the approval of the Minister of Education, Wanxue provides postgraduate training and entrance exam tutorship as well as admission consulting services to students at university level and above.
Wanxue is backed by well-known investors, including internet giant Baidu (BIDU: Nasdaq), investment firm Sequoia Capital China (红杉资本中国) and Beijing-based venture capital Legend Capital (君联资本). The latest financing event pushed the company’s total funding to over USD 140 million.
China's online education has been experiencing rapid development in recent years, with firms using some of the latest technologies – such as artificial intelligence and virtual reality – to improve education quality and efficiency. These firms are attracting a significant amount of investment from big players in the markets, including Tencent, Sequoia Capital China, Baidu, Matrix Partners, and Hillhouse Capital.
Other players in the same education segment include Beijing-based vocational training institution Zhonggong Education (中公教育), which went public last year and raised over USD 100 million on the Shenzhen Stock Exchange. Foreign counterparts, like American-based online education firm BetterUp, are also playing a significant role in the global online education market. It has raised a total of USD 145 million through its four funding rounds.
As the labor market becomes more competitive, many Chinese students are choosing to continue their studies by pursuing a post-degree. Hence, online education is surging as an alternative option to prepare themselves for the national postgraduate examination.
According to statistics, the number of students aiming for the national postgraduate examination in 2020 will reach a record high of 3.41 million, an increase of 500,000 compared to 2019.
China’s online education market is thought to have reached CNY 380.7 billion in 2019, from CNY 251.7 billion in 2018. Moreover, in 2018, the AI segment integrated into the online education industry was worth USD 12.38 billion; it’s estimated to reach USD 20.8 billion by the end of 2019, an increase of 68%. It will then push upward to reach USD 32.86 billion by the end of 2020, according to research firm iResearch.