Yuanfudao has ascended to become the most valuable private edtech company in the world.
The Beijing-based company captured a $15.5 billion valuation after closing a $2.2 billion round—climbing past India’s online learning platform, Byju, to take its place as the world’s most valuable private edtech company, according to PitchBook data.
“Yuanfudao is poised for high growth as it offers products from preschool to secondary education, which in theory, can support a child’s educational journey from the very beginning all the way through adulthood,” said Ryan Vaswani, an emerging tech analyst at PitchBook.
The company’s online education platform has about 3.7 million students in China using its suite of products, which include live tutoring, online question banks and a math problem-checking app.
Tencent led the first add-on to the company’s Series G with participation from Hillhouse Capital, Boyu Capital and IDG Capital. DST Global, which has also backed Chinese ridesharing goliath Didi Chuxing, led the second portion of the round. In March, Yuanfudao reportedly raised $1 billion at a $7.8 billion valuation.
The coronavirus pandemic has prompted a surge in remote learning, which has led to skyrocketing demand for digital learning tools for students around the globe. As of the end of the third quarter, investors had poured $8.2 billion into edtech companies across 543 deals, surpassing 2019’s $5.5 billion total, according to PitchBook data.
Chinese edtech companies have also taken a lion’s share of funding to date. Eight of the top 14 well-capitalized companies in the space are based in China, according to PitchBook data.
Liam Pisano, a managing partner at Boston-based EduLab Capital Partners, a seed-stage VC firm focused on edtech startups, said Chinese families view education as a means to social mobility and are willing to spend a good portion of their incomes to support their children’s education, a value he believes isn’t shared to the same extent in the US.
“When you combine a high level of commitment to education with the sheer population and addressable market, you get a powerful combination of companies that are looking to innovate,” he said.