Tencent-backed online education firm Yuanfudao raises $1 billion in new round

BEIJING (Reuters) - Chinese online education platform Yuanfudao said on Tuesday it has raised $1 billion in a new financing round, led by Tencent Holdings and private equity firm Hillhouse Capital Group.

Offering online courses and homework plans to students, Yuanfudao ranked first in China in-app purchases in the education category between January and mid-March, according to mobile app performance tracker App Annie.

Its 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 in China to attend classes via the internet.

The financing is also a rare bright spot of activity in the deal-making world, which has largely dried up as most travel as well as business meetings have been suspended amid the coronavirus pandemic.

Yuanfudao said in a statement that the fundraising, which also included investors Boyu Capital and IDG Capital, raised its valuation to $7.8 billion.

Reuters reported this month that Yuanfudao was close to completing a financing round that would value it at around $7.5 billion.

The company was valued at $3 billion in a previous round of financing in 2018, according to its official website.

Yuanfudao, which says it has 400 million users and 11 teaching and curriculum development centers across China, also counts Warburg Pincus and Matrix Partners China among its backers.

Reporting by Yingzhi Yang and Brenda Goh; Editing by Muralikumar Anantharaman and Edwina Gibbs