Zuoyebang, the China-based online education provider spun off by internet group Baidu, has entered discussions to raise up to $800m, Reuters has reported, citing two sources with direct knowledge of the deal.
The company is said to be targeting between $600m and $800m at a $6.5bn pre-money valuation, though talks are reportedly ongoing.
Formed in 2014 being spun off the following year, Zuoyebang runs an artificial intelligence-equipped online platform where students can upload questions in order to seek answers. It also operates a livestream-based course offering.
Zuoyebang had raised a total of $585m as of a $350m series D round in mid-2018. Telecommunications and internet group SoftBank’s Vision Fund was reported later that year to be considering a $500m investment but never followed through.
Investment management firm Coatue Management led the 2018 round, which included Goldman Sachs, Sequoia Capital China, GGV Capital, Tiantu Capital, New Enterprise Associates, Taihe Capital, Primavera Capital Group and Xiang He Capital.
The series D round reportedly valued the company below $3bn. It came in the wake of a $150m series C in 2017 led by H Capital and backed by Legend Capital, the venture firm spun out by conglomerate Legend Holdings, as well as Sequoia China, GGV Capital, Xiang He and Tiger Global Management.
Legend Capital, GGV Capital, Sequoia China and Xiang He Capital all participated in the series C round as existing investors. The forthcoming round is being raised as Covid-19 lockdowns in China promote greater interaction between students and online edtech offerings.
