China’s online education platform Yuanfudao has raised $1 billion in a new funding round led by its existing investor Tencent Holdings and private equity firm Hillhouse Capital Group.
The Series G round also saw participation from Hong Kong-based private equity firm Boyu Capital and IDG Capital. According to a company statement, the funding has raised its valuation to $7.8 billion.
Founded in 2012, Yuanfudao focuses on K-12 learning offering a suite of services, including artificial intelligence-enabled virtual classes, live tutoring, a database of exam problems and a popular homework help app. The homework support app scans homework problems and solves them instantly with the snap of a camera. The startup also operates a research institute for artificial intelligence, which could train its homework app to be smarter.
Yuanfudao has over 400 million users on its platform, and as of March, the startup has 11 teaching and curriculum development centres across the country. It ranked first in China in-app purchases in the education category between January and mid-March, according to mobile app performance tracker App Annie.
Meanwhile, the latest investment comes as students across the world are turning to online learning with schools shutting down amid the deadly coronavirus outbreak, which has developed into a full-blown global pandemic. Yuanfudao’s focus on online learning puts it in one of the few sectors that have seen a surge in investor interest as the coronavirus and school closures force students across China to attend classes or learn via the internet.
Yuanfudao was valued at $3 billion in the previous round of financing in 2018 when the company raised $300 million led by its existing investor China’s internet giant Tencent Holdings. Prior to that, the company raised $120 million in 2017, which puts it among the list of unicorns valued at more than $1 billion in the country.
The Beijing-based online education company counts Warburg Pincus, Matrix Partners China, New Horizon Capital, CMC Capital Group and Tencent Holdings among its early investors.