The online education subsidiary of China’s NetDragon yesterday announced that it has raised US$52.2 million in Series A funding, with participation from IDG Capital Partners, Vertex Venture, and Shenzhen-listed animation producer Alpha Animation.
The new round values the subsidiary at US$477.5 million. The funds will be used to accelerate product development and solidify its ‘first-mover advantage’ in disrupting the online education space in China, said an official release.
“We believe the education industry is ripe for a major change. There is a strong and ever-growing need for a mobile educational platform that creates true educational value and makes people want to come back to learn more,” Dejian Liu, Chairman and Executive Director, NetDragon said in a statement.
The online Chinese game developer and MMORPG (Massively multiplayer online role-playing games) operator, founded in 1999 and listed on the Hong Kong Stock Exchange, wants to bring gamification to learning and disrupt the space by leveraging mobile Internet technologies.
“Education is crucial to an individual’s development and is pivotal to improving one’s quality of life. However, not much innovation has happened in this sector over the past many years,” said Tay Choon Chong, Managing Director and Chief Investment Officer, Vertex Venture.
The Economist recently pointed out that despite a deeply ingrained reverence for traditional education institutions in China, the trend towards online learning is beginning to catch on, with an estimated seven million students in the country having just entered into university in September.
Online education startups from outside Asia are also looking to enter local markets in the region, with the likes of Australian online education platform Myndlyte eyeing expansion in Southeast Asia, China and India with its School of Music Online offering that aims to gamify the experience of learning an instrument.
Meanwhile, a recent industry report by Research and Markets showed the growing trend in China towards online education:
In 2013, 51 investment events took place in China online education industry, 44 of which were venture investments. And the figure rose to 54 during Jan-Aug, 2014, 10 of which (including acquisitions) occurred in Aug 2014 alone, equaling total investment of over RMB 1 billion (US$161 million).
Revenue from the online education market in China reached RMB 84 billion (US$13.5 billion) in 2013, according to a separate report released by iResearch.