burn out of billions of dollars in financing?
Text | Zhong Ling
Recently, two head K12 online education unicorns-Job Gang and Ape Guidance have successively disclosed a new round of huge financing. On the other hand, it was reported that another waist company on the same track was learned News of Bajun’s bankruptcy. The polarization of the
K12 online education track is becoming more apparent.
On December 28, the Job Gang officially announced the completion of the final settlement of the E+ round of over 1.6 billion US dollars in financing last week. Investors include Alibaba, Tiger Fund, Sequoia China, SoftBank Vision Fund Phase I, Fangyuan Capital and other new and old shareholder.
This is the second round of financing completed this year by JobBang. The latest post-investment valuation is approximately US$9.6 billion.
Coincidentally, on December 24, Yuandaodao announced that it had received 300 million US dollars in financing from Yunfeng Fund, and the settlement had been completed. The latest valuation after this round of investment has reached US$17 billion, making it the most highly valued unicorn company in the global online education industry.
Regarding the financing news disclosed this time, Yuandaodao told the media: the news is true and is part of the financing plan. This is also the third round of financing obtained by Yuanjiao in 2020, and the total amount of three rounds of financing has exceeded 3.5 billion US dollars.
On the other hand, the rumor that Xuebajun has fallen into bankruptcy and bankruptcy is not the first time that such a rumor has spread, but this time the founder, the director of academic affairs, the head teacher and other sources are confirming this rumor. As a fact. "Business Data Pie" sought confirmation from Xuebajun's public relations, but had not received a reply as of the time of publication, and there was no news from the official website customer service.
According to information from Tianyan Check, Xuebajun’s latest round of financing is still at the 2017 C round of 100 million US dollars. The bankruptcy of this company is just one case of many “not so lucky” online education companies established since 2012. The real situation is worse than the “nine deaths”.
The most expensive gold track: Sky-high financing and huge losses flew together.
Online education is not the first Internet track that burns money, but it is probably the track that burns the most money. K12 is even the "king of money burning kings". Called the most expensive gold track.
In June of this year, JobBang announced in June that it had completed US$750 million in Series E financing, and it was also rumored that it might complete a new round of financing in October this year. However, the news of the latter round of financing has not been officially disclosed. Until December 28, the operation assistant announced the completion of the E+ round of more than 1.6 billion US dollars in financing. The investors in this round of financing include Alibaba, Tiger Global, and SoftBank Vision Fund. Futures, Sequoia Capital China Fund, Fangyuan Capital, etc.
Regarding the reasons for this round of financing until now, 36Kr stated that the maximum amount planned for this round of financing at the initial launch of Job Help was US$1 billion. However, new and old shareholders continued to negotiate, and the final transaction volume fell to US$1.6 billion. In terms of the amount of funds-at this stage of financing, it is difficult for companies to fully implement the listed plans.
At the same time, another unicorn ape tutoring in the industry also announced in October this year that the $2.2 billion financing led by Tencent and DST has been completed, and set the single largest amount in China's online education field this year. Financing; In March of this year, Yuandaodao completed a $1 billion G round of financing led by Hillhouse Capital. Combined with the previous statistics of "Business Data Pie", as of now, the online education industry has disclosed 97 financing incidents in 2020; a year-on-year decrease of 35.33%; the total financing amount is about 52.75 billion yuan, an increase of 358.70% year-on-year.
Among them, the cumulative amount of two rounds of financing disclosed by Homework this year is US$2.35 billion (approximately 15.348 billion yuan), accounting for about 29.1% of the total financing of the online education industry this year; the three rounds of financing disclosed by Yuandao this year have accumulated The financing exceeded 3.5 billion US dollars (about 22.859 billion yuan), accounting for about 43.33% of the total financing of the online education industry this year.
It can be seen that with the rapid expansion of the market during the epidemic and the capital's head strategy, the online education track Matthew effect has already appeared.
, as we all know, on the golden track of , sky-high financing and huge losses fly together.
On December 4, Yi Education, which is also transforming from a homework search tool to online education, officially landed on Nasdaq, with an issue price of US$10.50 and a fundraising scale of US$330 million. On the first day of listing,The share price of Education together opened higher and lowered and fell below the issue price during the session. Since 2018, Education has accumulated a huge loss of 2.6 billion and a net cash outflow of 1.6 billion. The listing is not so much a "landing", but a "life extension".
's main online large-scale class organization, GSX, also experienced an "avalanche" in its performance. The net loss in the third quarter was 932.5 million yuan, compared with a net profit of 1.9 million in the same period last year, a year-on-year decrease of 49153.63%; compared with the previous quarter's 19 million yuan, The month-on-month decrease was 5007.89%. In contrast, the almost crazy marketing activities. In the third quarter of 2020, GSX’s marketing expenses reached 2.056 billion yuan, compared with 330 million yuan in the same period last year, an increase of 522.3% year-on-year.
The cost of online education is high and it is difficult to find profit. Why does the capital still have to “crowd out” to get in the game? Is the current valuation expensive? Ape tutoring, homework help and other leading institutions continue to raise funds. Where did the money go? What will happen to the development of online education in the coming 2021?
Where did the billion-dollar financing go?
Looking back on the financing frequency of Ape Guidance and Job Gang in recent years, it can be found that since its establishment, Job Gang has raised 7 rounds of financing, with a cumulative financing amount of approximately 3.435 billion US dollars; Ape Guidance has accumulated 10 rounds of financing, with a cumulative financing amount of approximately 4.044 billion US dollars. Super homework help.
At the same time, we can find that the financing of Ape Guidance mostly occurs during the summer vacation from May to August and the winter vacation from October to December; and the financing after the C round of Homework Help mostly occurs during the summer and winter vacations.
Where is the money spent? In recent years, the online education marketing wars that have been launched during the summer and winter vacations are the biggest investment direction.
According to public data, during the summer this year, Yuanjiao, Xueersi Online School, Homework Gang, and GSX will have budgets of 1.5 billion yuan, 1.2 billion yuan, 1 billion yuan, and 800 million yuan respectively. After the summer vacation ended, the four budgets totaling 4.5 billion yuan actually became 6 billion yuan.
And now the winter vacation is approaching, from CCTV prime time to introduce the full line of APE tutor's brand advertisements for more than a minute, to the overwhelming push advertisements on elevators and subways, the Ape who raised 2.5 billion US dollars in the past two months Counseling is already working hard. Job Gang has not been outdone lately, and the advertisements all over the world indicate that the next financing is determined.
However, related advertising providers revealed to "Business Data Pie" that the advertisements on these framed media such as TV stations, light boxes, elevator shafts, etc., are more brand advertisements, which can bring certain brand effects to enterprises; but can be traced back Poor performance, inability to interact in real time, and poor user guidance.
“Therefore, short video platforms, including Douyin and Kuaishou, are favored by online education institutions that emphasize customer acquisition efficiency because of their uninterrupted live sharing, real-time interaction, and traceability of sales leads, etc. Advertiser said.
According to AppGrowing data, in 2019, Douyin's advertising in the education sector reached 6,429, with a market share of 8.96%. Volcano videos and watermelon videos accounted for 7.71% and 4.97% respectively. 2020Q1 Watermelon Video’s advertising in the education sector reached 4,939, with a market share of 19.51%, an increase of 19.46%; Volcano’s small videos reached 3,646, accounting for 14.4%; Douyin reached 2,422, with a market share of 9.57%.
on Douyin, "Business Data Pie" found that Yuandaodao has recently launched a new advertisement. At this stage, it is registered in the official Douyin live broadcast room of Yuandao.com.cn. The course of the class is only 30 yuan, and 22 pieces of teaching aid stationery are also free.
However, I clicked on the advertising video on the leftmost side of the above picture. Almost all 209 comments were registered for nearly ten days without shipping, and I couldn't contact customer service for a refund.
At the same time, the job helper has recently advertised winter vacation special courses on the Douyin platform. "The job helper has a live broadcast of the number of words and 2 subjects, only 49 yuan for 33 lessons, and the top 100 will also send supplementary materials. ".
But from the point of view of the comment area, the 79 comments basically asked why they did not give away the auxiliary products mentioned in the videos such as the meow machine and the four classics, and how to withdraw from class.
It can be said that online education advertisements have supported the shakingHalf the sky for audio information flow advertising. Perhaps it was because of seeing the subtle relationship between advertising and conversion rate that ByteDance made up its mind to bet on online education, especially the "Guagualong" series of early childhood enlightenment as the first breakthrough. Industry insiders pointed out that group buying, travel and other industries have low transaction unit prices, high transaction frequency, and low user decision-making costs. Therefore, marketing wars can accumulate a large enough traffic pool to help each platform segment users and occupy the market. The education product cycle is long, the transaction frequency is low; and the transaction price is also high. At the current stage, each company has launched special short-period small lesson packages, focusing on famous teacher lessons and low prices, but also to reduce the cost of decision-making and maximize the attraction of accurate user groups.
But at the same time, he also said that although the unit price of special courses is low, the time cost of trial and error for students is too high, and parents still have insufficient trust in low-cost courses. As a result, special courses in online education institutions are more "losing money" at the same time. Also lost the brand reputation. In addition to traditional advertising and social media, telemarketing is also one of its main sales costs. The top online education company often has thousands of telemarketers.
What did billion-dollar financing burn out?
In addition to marketing, another important piece of K12 online education company’s money is spent on product creation, and the development paths of the two products are also strikingly similar: from a tool-based product "photographic search for questions" to a question bank product, and then Expand to heavier online courses.
Ape Guidance has a variety of online education products such as Ape Guidance, Ape Question Database, Little Ape Search Questions, Little Ape Oral Calculation, Zebra AI Lessons, etc., and has served more than 400 million users, including "Ape Guidance" and "Zebra AI Lesson". The number of regular-priced online courses totaled 3.7 million students. In recent years, the "Zebra AI Course" that has sprung up all the time has competed in the market of early childhood enlightenment courses with the spark thinking of Yuanjiao's investment, the byte-beating "Guagualong" series, and Netease Youdao's "little raccoon" series.
Homework Helper has a variety of products such as homework helper, homework help live class, homework helper calculation, meow machine, etc. The homework help APP can provide services such as photo search, intelligent practice, homework correction, live class, VIP, etc. The number of paid members for value-added services exceeds 12 million; the total number of participants in the live class in the fall of 2020 will exceed 10 million, and the number of students in the regular-price class in the fall of 2020 will exceed 2.2 million; 70% of the students in the regular-price class come from third- and fourth-tier cities and beyond. A year-on-year increase of 10%. In terms of
revenue data, it is reported that Yuanjiao had set a revenue target of nearly 10 billion at the beginning of this year. K12 business including large classes and Zebra AI classes is expected to complete 8 billion confirmed income, and civil service examination training The business chalk public examination will complete 1.23 billion confirmed income.
Judging from the current number of trainees, according to public data, the number of long-term payers for the Summer Ape Tutorial in 2019 is about 1.2 million. In 2020, the number of long-term payers reached 1.6 million in summer and 2.1 million in autumn, which basically met the expected target. The income from the chalk public examination is currently expected to exceed 2 billion yuan.
According to the latest data in the financing news disclosed on December 28, Jobbang’s total daily activity exceeds 50 million, monthly activity exceeds 170 million, and the cumulative number of activated user devices exceeds 800 million. Jobbank’s VIP membership value-added services , Accumulative paid members have exceeded 12 million, occupying the advantage of online education traffic.
In terms of team, the two super unicorns have also reached an unprecedented scale, not only surpassing 30,000 people, but also the cities are highly overlapped. As of October 2020, in addition to its Beijing headquarters, Ape Tutorial has established teaching and research centers and branches in Wuhan, Xi'an, Zhengzhou, Nanjing, Chengdu, Jinan, Changsha, Tianjin, Chongqing, Shenyang, Changchun, Hefei and other cities. The company has more than 30,000 employees. Up to now, the job helper has more than 35,000 employees and has branches in 11 cities including Beijing, Xi'an, Wuhan, Hefei, Zhengzhou, Chengdu, Jinan, Shijiazhuang, Nanjing, Changsha, and Chongqing.
So far, billions of dollars have been burnt, not only the scale of users and teams, but also the barriers to products, content and services. As the scale of the head unicorn further expands, more space is left for small and medium players. Less.
Both ice and fire, the tail institutions fall to 2020
Although the financing of the head institutions is fierce, but for SMEs, The window of K12 online education has been closed.
On December 28th, Xuebajun was rumored to go bankrupt again, and the hundreds of millions of dollars he had raised in the past 7 years was also in vain. Zhang Kailei, the founder of
Xuebajun, said in the work group: Notice 1, Hefei School Management and Office will be accepted by 51talk and will pay wages and social security. Notice two, a program like this will help everyone get wages and have jobs.
Xuebajun's 1-on-1 Academic Affairs Director sent a message to the circle of friends, saying: Xuebajun has closed down! The leader gave us several hours of oral meetings without electronic equipment (to prevent recording). We are now queuing to hand in our work phone and card number. This is also the last circle of friends before I hand in. ...... The company's big fanfare on Double Eleven and Double Twelve attracted hundreds of millions of funds. Now that it is gone, this is a very serious malicious fraud! ! !
Xuebajun’s class teacher arranged in the class group said: I’m sorry, Xuebajun’s partial acquisition is equivalent to bankruptcy. All of our teachers were forced to dismiss, and everyone had no wages. We are also victims... I hope that parents will also begin to pass the law Rights protection... out of conscience, hereby inform.
also started as a photo search tool, providing online free answers to homework questions and difficult points for middle and high school students. Homework assistance and ape tutoring continued to raise funds, but Xuebajun ended dismal.
Looking back, at the beginning of 2018, Zhang Kailei had called out the goal of ensuring the annual revenue of 1 billion yuan; in July of the same year, there were rumors that Byte Transfer was going to acquire Xuebajun’s To B business, but the two parties did not respond at that time.
However, from the perspective of financing history, Xuebajun has received four rounds of financing since its establishment in 2013, with a total financing of only about 156 million US dollars. The most recent financing was nearly four years ago. In January 2017, Xuebajun announced that it had completed a $100 million Series C financing, with investors from China Merchants Capital, Far East Group, and Wanxin Media. This is insignificant compared with the financing scale of Yuanfudao and Jiaxingbang.
In addition, in terms of mode selection, Xuebajun chose the online one-to-one mode. Compared with large classes and one-to-many small classes, one-to-one customer acquisition costs are higher for teachers. This makes it more difficult for academic masters who are already blocked in financing to achieve large-scale profitability.
In contrast, in the industry, because it is known as the first to run online one-to-one profit model, and the popular K12 online English unicorn VIPKID is also blocked in financing, transforming and incubating the main class of the rice online school. The reason for
is the high cost. There have been media reports that VIPKID’s customer acquisition cost is as high as 8000-10000 yuan. In this regard, VIPKID founder and CEO Mi Wenjuan responded when participating in the program. : The single customer acquisition cost of 8000-10000 yuan is a short-term and individual phenomenon, such as some testing channels, increased investment in marketing and other factors; the current single customer acquisition cost of VIPKID is 4,000 yuan on average.
In summary, Xuebajun has come to a bleak ending today. Although it was unexpected, it is actually reasonable.
is over, and where will online education go?
"If you want to fight for the future by burning money and low-cost classes, online institutions may wake up." An industry insider who did not want to be named revealed to the business data faction that online education Most of the conversion volume of special courses offered by institutions to regular courses is about 7% or even lower, and it is very rare to reach 10%.
has high costs and difficult profitability. Why are capital still entering the market? Cheng Ziying, a partner of the Education Industry Fund of the Cyberspace Investment Group, said that unlike individual retail investors in the secondary market, professional investors and investment institutions in the primary market are at the very beginning of choosing the target track and institution for entry. Consider how to exit as soon as possible. She pointed out that for professional investors and investment institutions, how to help customers achieve value-added in the most efficient manner is the most important goal. When choosing a track, which track is the hottest, the market is the biggest, and the demand is the most rigid is the investor's focus.
education is a long-term golden track, and the online education track under the epidemic is undoubtedly the hottest. The rigid teaching needs of parents and student users are forced to go online; the influx of traffic and the rapid expansion of the market in the short term attract more attention from capital.
However, during the epidemic, capital has more strict control of risks, and the track has reached a mature node, so there are a few companies with larger volumes and wider users.Organizations are supported by well-known capital, which attracts more capital to stand in line.
Some investors who are concerned about the education track told the "Business Data Pie" that ape tutoring and homework help to get money crazy, and can quickly seize the window of the sinking market brought by the epidemic, take the market first, and make profits on a large scale . After that, it seeks a higher valuation and promotes its listing. Currently, listed online education institutions are generally losing money. Once the key turning point in profitability is reached, the valuation will rise again wildly. You can refer to Jingdong and Meituan.
Nowadays, K12 online education has evolved from a rivalry to an era of giant competition. In the future, the scale of the Internet may break the highly fragmented situation of traditional education, but it is unlikely that oligarchs like Didi and Meituan will emerge. The latest valuation of
Yuandao after this round of investment has reached 17 billion U.S. dollars, and the market value of Good Future, the largest Chinese concept stock education leader, has a market value of 41.849 billion U.S. dollars. Yuanjiao has only been established for 9 years, and Good Future has only been established for 17 years. .
At present, there are also voices in the industry that "compare ape tutoring and homework help to the next New Oriental and a better future". But in fact, there is not only a gap between the new and old giants in terms of brands, but also that New Oriental and Hao Future has realized the linkage of online and offline user traffic pools. For the education market, offline is still an inseparable and important part.
