Baidu-owned education startup Zuoyebang just raised a $350 million Series D led by Coatue Management. Participating investors include Goldman Sachs, Sequoia Capital China, New Enterprise Associates, among others.
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Founded in 2014, Zuoyebang is an online education platform where K-12 students can upload their homework questions and search for solutions. The company started to run independently from Baidu in 2015 when it also raised its first round of $25 million. In 2016 and 2017, the company scored a $60 million Series B and a $150 million Series C, respectively.
Zuoyebang has been successful in retaining its investors. Its 2015 Series A was led by Sequoia and Legend Capital. The two firms continued their support in Zuoyebang in the next two rounds of funding, with more investors like GGV Capital and Coatue Management hopping on along the way.
Based on the community feature of Baidu Knows, a platform that allows users to ask and answer questions, Zuoyebang targets K-12 students. The startup allows students to upload a photo, which the platform will analyze and match to questions in its database. For questions without solutions, students can opt to pay for virtual one-on-one sessions with teachers that partner with Zuoyebang.
The snapchat-your-homework idea may seem to be the way to go to attract Generation Z in China, although there is a catch. The online education space is very competitive in China. Zuoyebang is in direct competition with Xueba100 and Yuanfudao. Both companies provide similar services and have collectively raised over $350 million. Yuanfudao is also backed by Tencent.
So far this year, Sequoia and Sequoia Capital China have invested in four Chinese education startups, including Zuoyebang. This investment pattern may indicate that China’s online education market, although crowded, still has untapped potential.
Illustration: Li-Anne Dias