Childrens Coding Company Xigua Chuangke Raises B+ Round from Tencent
After backing VIPKid’s subsidiary in January, this is the second time Tencent has invested in an online education firm in 2020.
According to Jingmeiti, on May 6, 2020, online programming training platform Xigua Chuangke (西瓜创客) announced its Series B+ round of financing from Tencent. Prior to this, the company had raised a total of three rounds of financing worth CNY 210 million backed by various investors such as New Oriental Education and Culture Industrial Fund (新东方教育文化产业基金) , Sequoia Capital China and SAIF Partners (赛富投资基金).
Founded in January 2017, the firm focuses on graphical programming education for children aged 6-12. Up to now, the number of users has exceeded one million based on statistics from 64 countries and 484 cities across the world. According to the 2017–2023 Chinese Children's Programming Market Analysis Forecast report, the current domestic children's programming market scale has reached CNY 10.5 billion, and the overall market size is expected to expand by CNY 10 billion every time the penetration rate increases by 1%.
Lead investor, Tencent Investment is one of the investment and strategic departments of Tencent Holdings (HKG:0700). Founded in 2008, Tencent Investment focuses on global investment in Consumer Internet and Industrial Internet. It has invested in more than 800 companies in the past decade, including more than 100 listed companies and unicorn enterprises. The investment covers more than 20 countries around the world. Tencent Investment is committed to finding entrepreneurs that provide users with long-term value and helping them grow.
Regarding this round of financing, Xiao En (肖恩), the founder of Xigua Chuangke, said: “Xigua Chuangke's single-user economic model is excellent, and the company's development and growth are sustainable. After this Series B+ financing, we will strengthen our teaching and conduct in-depth research on the cultivation of programming with Chinese primary school students in mind, and enable children to improve their ability to face the future comprehensively.”
Although the company is backed by strong investors, the competition in the industry is getting tougher. Just last month, Codemao, another children’s programming education firm raised CNY 250 Million, eyeing the adult market.
Online education has been the object of intense focus during the last few months, partly due to the mandatory social distancing. Mature coding education, a natural product of the spread of the Internet, is exciting investors once again, with a buzz reminiscent of the 2015 investment craze of billions US dollars.
The year 2018 witnessed a total investment of CNY 6.33 billion (USD 931 million) in K12 education, growing at a CAGR 50.12% from 2016. Following the Ministry of Education policy on promoting STEAM (Science, Technology, Engineering, Art, Mathematics) in 2015, the startup players and educational giants have been accelerating their product development and market deployment. AllDream (奥蒙编程), CodePKU (编学编玩) and Codemao, together with creative education represented by RoboRobo (乐博乐博机器人), have been trying to take a position in some educational niche segments that contain less threat from giants such as TAL Edu (TAL:NYSE) and New Oriental (EDU:NYSE).