K12 Online Education Startup Raises Two Rounds Worth Hundreds of Millions
COVID-19 and China
Chinese Yuan and US Dollar bills. Image credit: Eric Prouzet/Unsplash

Just recently, ‘Guo rou wang xiao’ (果肉网校) which directly translates to Fruit Pulp Online School, announced that it had raised two rounds, Series A and A+, on February 17 and 18 respectively. The company is backed by strong investors such as Zhen Fund and Welight Capital (微光创投) with the total amount the funding at more than CNY 100 million. 

Although K12 education is in rigid demand, parents and students are usually cautious about online education due to the high trial-and-error cost at this stage of learning. This led to the relatively small market share of online K12 education at its initial stage of development, which was only 9% in 2012. Thanks to the improvement of education concept among post-80/post-90 generation parents and their consumption ability, post-00/post-10 generation’s familiarity of the Internet, and the demographic dividend brought by the second-child policy, the corresponding parents and students are more receptive to online K12 education these years.

In recent years, the trend of ‘online teaching’ has stepped into tens of thousands of homes. As a new online teaching platform, Fruit pulp online school has attracted a large number of users since its launch and has also gained a good reputation in the industry. In fact, the mode of online teaching has long been around for a while, but the question is, how did a startup founded merely a year ago get so much attention, reaching hundreds of thousands of paying users and with the highest market share in some regions?

The Zhen fund-backed startup is an online tutoring school which is jointly founded by the top 5% elite teachers in the industry and Alibaba's artificial intelligence expert team. According to the company, it aims to make thousands of study-rooms at home just one-click away from high-quality educational resources.

It also stated that most of the research and development members of the firms are from Alibaba, who have a solid understanding of computer technology and changes in the Internet industry in the past ten years. 

Talking about the technology, the company claims that the AI of the online school can accurately capture every learning action of children during the online classes, and analyze the learning difficulties of each child. The teacher then arranges assignments as needed, strengthens targeted exercises and arranges weekly exams and tests to adjust the content of the curriculum based on the child's performance. Using the collected data of the results of the weekly exams the AI will prepare an intelligent mock exam to let children understand the learning problems at each stage. 

Online learning has undoubtedly been a hot topic in the education industry during the past couple of years. As we mentioned above, we saw firms getting splashed with capital, eventually valuing the companies at hundreds of millions of dollars. The beginning of 2020 started off with an epidemic in China which pushed online schools to take action. Primary and secondary schools started remote online teaching, through platforms such as Ding Ding and Tencent Meeting, accelerating the market education of C-end users. 

The move of almost 180 million K12 students towards online education gave the track all kinds of opportunities, and therefore the number of student enrolment for ‘Fruit Pulp’ increased fivefold. Founder of the startup, Zhu Ting, told 36kr that the battle of the online schools will go on for the next five years. Small companies will not have a chance to enter the market and, in the future, there will be multiple leading brands coexisting. 

The company started off by targeting a specific region, unlike other fellow competitors which turned out to be its advantage. Zhu believes that cutting in from a single province/city can take advantage of the unique local cultural attributes and targeted content to achieve better conversion results. He further stated that their firm has become a regional head brand in south China, and will also use the newly raised funds in cross-regional exploration.

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