Chinese Edtech Startup Zuoyebang Obtains $1.6B in funding, Reigning Over Online Tutoring Market

Chinese online education startup Zuoyebang raised $1.6 billion in a recent round of financing from investors including Alibaba Group, Tiger Global, Softbank’s Vision Fund, Sequoia Capital China, FountainVest Partners and Ontario Teachers’ Pension Plan Board (Ontario Teachers’).

With both kids and their parents stuck at home due to the COVID-19 pandemic, demand and competition in the field of online education resources are at an all-time high, shaking up the education industry.

Yet, among the players scrambling for a piece of the action, Zuoyebang stands out with its unique edges.

Founded in 2015, Zuoyebang has quickly become the largest online education company in China with over 800 million registered user devices, more than 50 million daily active users and 170 million monthly active users, according to the company’s data.

The platform offers a comprehensive suite of online tutoring products and services, including online courses, live-stream lessons and homework assistance, for K12 students covering all academic subjects.

A sizable user base and penetration into lower-tier cities

China has nearly 200 million K12 students – equivalent to the total population of Brazil, 70% of whom reside in third-tier cities and smaller centers.

Markets in lower-tier cities hold great potential, and are vital to the online education industry. It is here that Zuoyebang has taken the lead among K12 students –70% of the company’s user base hail from from third-tier cities and below. At the national level, Zuoyebang has more than 50 million daily active users and 170 million monthly active users. Seven out of ten Chinese students, from first graders to third-year high schoolers, are using Zuoyebang’s online learning products.

Over 65 million Chinese students are enrolled in Zuoyebang’s live-streaming courses. More than 10 million paying students enrolled in Zuoyebang’s live-streaming courses in the past fall, setting an industry record.

Traffic from the Zuoyebang super app means the cost of acquiring new customers is low – according to the company’s own data, its customer acquisition costs are the lowest among peers and less than half of the industry average.

Flagship education services and products

Zuoyebang owns some of the most popular education-related apps, including its flagship Zuoyebang, Zuoyebang Live Courses, and Zuoyebang Oral Arithmetic Calculation, as well as other home-learning products.

Zuoyebang, the company’s eponymous flagship product, is the only education app in China with more than 100 million monthly active users and the only one to enter the top 30 mobile apps in all categories in the field, according to Quest Mobile data. Its photo search and problem-solving tool is designed to help primary and middle school students study more efficiently, with a library of more than 300 million questions.

Through image and voice recognition, students’ questions can be answered with step-by-step explanations, with an accuracy rate higher than 97%, according to the company. The app provides around 43 billion tutoring and concept explanations, with over 1.5 billion service requests each year, the company said.

This super-app integrates functions from the company’s other apps including Zuoyebang Live Courses and Zuoyebang Oral Arithmetic Calculation, giving users one-stop access to the whole suite of Zuoyebang’s products and services.

“Zuoyebang’s continued success comes as a result of our innovation in technologies and ongoing traffic acquired from the Zuoyebang Super APP,” said Gongming Chen, the firm’s co-founder. “Our unique strategy enables us to achieve both scale and efficiency and sets us up with strong foundations for future growth.”

With an overwhelming market share of 75%, the Zuoyebang super app has transported its sizable traffic to other products, such as Zuoyebang Live Courses, an app providing all-subject tutoring courses for primary and secondary school students aged 6-18.

With its “teacher + supporting tutor” service model and one-stop learning infrastructure covering teaching, learning, testing, training and evaluation, students from any part of China can access live-streaming courses delivered by distinguished teachers to complement their offline education.

The company’s live-streaming services have delivered more than 250,000 online lessons so far, and more than 65 million students have participated in the live-streaming, according to the company.

In 2020, the number of students in paid summer live-streaming courses totaled 7.8 million, a year-on-year increase of more than 390%. The number of students in regular-priced summer courses was more than 1.71 million, a year-on-year increase of over 350%, recording the highest growth vis-à-vis competitors.

AI and other technology-driven innovations

As the largest K12 online education company in the country, Zuoyebang stands at the forefront of technology-driven innovation. It has rolled out several cutting-edge technologies based on big data, state-of-the-art algorithms and AI.

The firm has built a solid foundation in the AI sector, exploring OCR text recognition, speech recognition, and semantic recognition.

Its Cocos-courseware, an AI-assisted learning platform that pairs students with teachers via live-streaming, is designed to help first grade students who struggle with concentrating and processing information.

Through gesture recognition, facial and facial expression recognition, as well as voice recognition, the platform can monitor and analyze students’ concentration levels and adapt to each individual learning patterns, thus making learning more engaging to young students.

Zuoyebang’s Oral Arithmetic Calculation app offers a one-stop homework tutoring platform for primary school parents and teachers. Backed by the company’s massive database and combined with AI technology, the app is equipped with various functions including photo inspection, oral arithmetic calculation practice, class creation and homework assignment.

The company also offers a brand-new Paperang printer, a smart error-management device equipped with OCR text recognition technology. By taking photos of errors, students can easily print and categorize their mistakes, optimizing their learning process. The device has amassed over 7.5 million registered users since its launch in February 2017.

YAYA AI Courses, designed for kids aged 2 to 8, is one of Zuoyebang’s initiatives for developing products for young children. They include a variety of AI-driven products covering multiple subjects, including writing, English and one named Thinking Enlightenment, providing kids with customized curricula.

Distinguished teaching staff

Zuoyebang employs over 35,000 staff nationwide. Headquartered in Beijing, the company has 11 branches across the country including in Xi’an, Hefei, Zhengzhou, Wuhan, Chengdu, Chongqing, Jinan, Changsha, Nanjing, and Shijiazhuang.

As an education platform, the firm knows that teaching staff is key to any effort. Zuoyebang’s Famous Teacher service is led – and designed – by outstanding alumni of some of China’s most prestigious universities, including Peking University and Tsinghua University.

The program requires exceptional teachers to analyze, recognize and overcome the specific challenges in each student’s learning life.

The online education industry in China has seen a spurt growth fueled by lockdowns and an e-learning frenzy during the COVID-19 pandemic. Thanks to new technologies and edtech companies like Zuoyebang, millions of students living in small cities who used to be affected by scarce education resources can now access quality lessons and services that used to be the privilege of small elites.

SEE ALSO: K12 Education Gaint Zuoyebang Awarded Honorable Mention by World Economic Forum

As the largest K12 online education platform in China, Zuoyebang has always been committed to technology-driven innovations that optimize online infrastructure and to enhancing students’ learning experience.

As its mission statement goes, Zuoyebang is constantly striving to make quality education accessible to all.