Zuoyebang, a Chinese online education
startup, secured $1.6 billion from Chinese e-commerce giant Alibaba Group
Holding Ltd (NYSE: BABA) in its most recent funding round. The Covid-19 pandemic has fuelled a red-hot
business for distance learning.
As more students embraced e-learning this year as a means of studying, investors flooded into the sector, a trend that was accelerated by school closures amid the pandemic. Global market data tracker Statista expects China’s online learning market to reach $48 billion in 2020, up almost threefold compared to five years ago.
It is loosely translated as “homework
assistant,” Zuoyebang is a spin-off of China’s search engine giant Baidu Inc.
The five-year-old company, founded by former Baidu executive Hou Jianbin,
offers live-streamed classes and other online-study services to over 170
million people each month throughout China. The company has claimed that at
least 50 million students are using its platform on any given day.
Zuoyebang will be able to compete with significant
competitor Yuanfudao with the new funding. After closing two funding rounds
worth $2.2 billion, the online tutoring startup backed by Tencent Holdings Ltd
and Hillhouse Capital said it had reached a $15.5 billion valuation in October.
Market research firm Zero2IPO Group reports that Chinese education startups have raised at least 47.6 billion yuan in investment in the year until Dec. 18.