China's private enterprises are betting big on the online paid knowledge market.
Tomorrow Advancing Life (好未来, NYSE: TAL) has injected CNY 100 million (equivalent to USD 14 million) into Xiaoetong (小饿通).
Previously, Xiaoetong had completed three funding rounds, with the most recent funding round being a Series A worth CNY 300 million, led by Ximalaya (喜马拉雅).
Founded in 2016, the Shenzhen-based Xiaoetong's products include enterprise training, marketing, cloud, consulting and content services. As its core SaaS offering, it provides more than 200 "content knowledge."
The company claims to have more than 680,000 registered stores on their platform, meaning their content reaches over 400 million users. It has also engaged in providing online traffic distribution services to major tech domestic players, including Baidu, Tencent, JD, Youku, Xiaomi and Chinese TikTok, Douyin.
Shortly after the fundraising event, TAL CTO Mr. Huang Yi (黄琰) said that Xiaoetong is the one of the largest paid-for knowledge platforms, and one of the best new education service providers in the country. TAL is confident about the company's vision and will continue to work with Xiaoetong, being committed to developing and improving online education.
As more Chinese are getting too busy to find a suitable time to read books, they are now more willing to pay for online content. Therefore, many tech enterprises are seeing tremendous opportunities in the online knowledge-sharing economy.
Another reason for such an interest in online knowledge is the trade-off it offers when compared to offline education; the online content is much cheaper and saves time. Moreover, people with limited spare time can learn new skills quickly.
Even though the online paid knowledge market is estimated to be in its early stage, a boom period is expected with the introduction of new technologies such as VR and AR, to present more diversified content.
In 2016, the Chinese online paid knowledge market was estimated at approximately CNY 4.1 billion; that number is expected to maintain a monumental growth with a CAGR of 300%, reaching CNY 23.5 billion by 2020, according to iResearch report, a market consultancy firm.
The online paid content is only a part of the digital world and, as everything is interconnected in this world, threats and risks are inevitable. How these new tech enterprises will ensure the quality and safety of online content amid competition and other challenges is a question that Xiaoetong and many of its rivals will face.