BEIJING/HONG KONG (Reuters) - Online tutoring start-up Zuoyebang is in talks to raise $600-800 million in a new funding round as the coronavirus pandemic encourages investor interest in education technology, two sources with direct knowledge of the deal told Reuters.
The five-year-old Chinese company is valued at $6.5 billion prior to the investment, the sources, who spoke about Zuoyebang’s plans on condition of anonymity, said, adding that the talks were fluid and subject to market fluctuations.
A spokesman told Reuters that the information was not accurate, but declined to provide further details. He said Zuoyebang had “kept good contacts” with capital markets.
Students in China can upload their homework questions and search for answers on Zuoyebang’s platform, which uses artificial intelligence.
Education technology, known as “edtech”, has been one of the few sectors to be boosted by the coronavirus pandemic as schools were shut and students were asked to take online classes from home in China, which has started to slowly reopen schools.
Zuoyebang, which was founded by Chinese search engine giant Baidu (BIDU.O) in 2014 and spun off in 2015, has also launched live-streaming courses.
Its investors now include Goldman Sachs (GS.N), Sequoia Capital China, Coatue Management and GGV Capital. Its last fundraising was in 2018, when it secured $350 million and was valued at less than $3 billion, researcher Hurun has said.
Yuanfudao, Zuoyebang’s main competitor in China, said in March it had secured $1 billion in a new round of financing that valued it at $7.8 billion.
Reporting by Yingzhi Yang in Beijing and Kane Wu in Hong Kong; Editing by Brenda Goh and Alexander Smith