What’s new: China’s online tutoring startup Yuanfudao said it has completed a new funding round of $300 million, bringing its total fundraising this year to $3.5 billion.
The company didn’t provide information about the investor or its most recent valuation. Tech media outlet 36Kr reported that the investment was made by Yunfeng Capital, a private equity fund backed by billionaire Jack Ma.
The latest funding came only two months after Beijing-based Yuanfudao announced it raised $2.2 billion in two rounds. The company was valued at $15.5 billion in the previous rounds, the highest among global education technology upstarts.
What’s the context: Yuanfudao has raised a total of $3.5 billion this year to support its efforts in the increasingly competitive online education market.
Online education service providers have become investor darlings globally this year as the Covid-19 pandemic forced schools to close and more students to study from home. In China, online education startups are racing for new capital to fund cutthroat battles for market share.
China’s online education market is projected to grow by 12% to reach $61.5 billion this year with a major boost from the Covid-19 pandemic, according to Caixin Global Intelligence. Despite all the money flowing in, online education enterprises in China are struggling to make a profit as they spend heavily on marketing and fight price wars to secure market share.
Analysts said the industry will continue burning cash for a while and the race to the bottom will force a consolidation of the industry.
Related: CGI: China’s Online Education Industry Locked in a War of Attrition
Contact reporter Han Wei (weihan@caixin.com)
