Online Education Firm 17Zuoye Plans IPO before 2021
As offline education centers closed down and students were forced to switch to online learning, the COVID-19 pandemic has been a blessing in disguise for many online education companies.
According to Chinese media channel IPO Zhidao, online K12 education platform 17Zuoye will formally submit the F-1 prospectus to the US Securities and Exchange Commission soon and plans to complete its listing before the end of 2020.
Due to the impact of the epidemic, Chinese online education companies listed on the US stock market, such as NetEase Youdao and GSX Techedu, have performed relatively well in 2020. However, GSX Techedu saw a massive drop in share price on October 20, 2020. If we talk about the overall year, GSX's range increase was recorded at 207.23%, while NetEase Youdao saw an 88.21% increase. In the same period, New Oriental and TAL, the two top-listed edtech firms on the US stock market, were up 45.87% percent and 40.64%, respectively.
Like Larry Chen, GSX Techedu's founder and CEO, Liu Chang, the founder of 17Zuoye, has a strong understanding of New Oriental. He served as the youngest school principal at one of New Orientals schools and later as the assistant vice president of New Oriental.
At present, the company's specific products include school education platforms, a family education platform, an online subject tutoring platform for primary and secondary schools, and a social education platform.
Among them, online schools are the primary source of income for the firm.
According to the same source, as of May 2020, 17Zuoye's products have covered 160,000 schools in 365 cities across China, with over 100 million users. The user ratio of teachers, parents and students is about 1:10:20.
It seems as if more leading online education companies are planning IPOs soon, considering their aggressive spending on advertisements. We might see two leading companies, Yuanfudao and Zuoyebang, go public either by the end of this year or early 2021.
Yuanfudao has recently completed an investment worth USD 2.2 billion, whereas Zuoyebang has been rumored to be working on a Pre-IPO USD 650 million round. EqualOcean asked the latter company to comment – they replied to say that the story is just a rumor.