Author: Rui
December 7, whom to learn, announced a few value investors have agreed to purchase about $ 870 million newly issued shares of the company. In response to this financing, people close to GSX said that the move is to increase the company’s cash reserves and increase its full investment in the K12 business brand Gaotu Classroom, including investment in technology research and development and content research and development. The attractiveness of excellent teachers and talents, as well as the investment in student learning experience and learning effects; at the same time, the company will increase its investment in the market with high return on investment.
Gaotu Classroom is a brand of online live broadcast large classes under GSX. On October 9, GSX carried out a strategic upgrade. All K12 businesses (primary and secondary education services) under the GSX brand were integrated into the Gaotu Classroom brand. The GSX brand only provides adult services, and fully focuses on postgraduate entrance examinations, English, Finance, accounting, public examination, study abroad and other businesses.
"The increase of 870 million US dollars by GSX is an upgrade of the new round of technology, content and marketing battles for top online education companies. Even the listed top online education companies have to start replenishing ammunition." "Deep Web" said.
Half a month ago, the twin giants of education and training, New Oriental and Good Future, both started a new round of fundraising. On November 9, New Oriental was officially listed on the main board of the Hong Kong Stock Exchange, issuing 8.51 million H shares, and the maximum amount of funds raised was HK$11.9 billion (approximately RMB 10.353 billion). Four days later, Good Future issued an announcement that an international investment company agreed to purchase US$1.5 billion of newly issued Class A common shares of Good Future. After completion, it will hold 8.35% of the future outstanding shares.
needs to be aware that just half a month ago, GSX ushered in its first loss since its listing. According to this year's Q3 financial report, GSX's net loss in the third quarter was as high as 933 million yuan, compared with a profit of 1.9 million yuan in the same period last year.
In this regard, the founder of an online education company explained to "Deep Web": "The education and training industry is very seasonal. The third quarter of each year is the peak period for customer acquisition during the summer vacation. In order to obtain more users, the top online education company Will increase the investment in marketing expenses. When users grow rapidly, it will bring losses, if the growth rate slows down, the financial situation will improve and even make money. Choose whether to make money or to trade losses for scale, the head online education company can adjust itself However, there is a window period for the development of online education and the establishment of industry barriers. The differentiation of the industry echelon is obvious. With the concentration of capital and industry users to top brands, some top online education companies have to trade losses for scale. Strategy adopted".
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