Operation Group Obtains More Than 1.6 Billion US Dollars Of Financing And Builds High Flow Barrier

"Reserve more bullets to cope with more fierce competition in the future." In Beijing headquarters development building office, operation help related person in charge Xu Xiaohan told reporters.

On December 28, 2020, the operation group announced that it had completed the e + round financing with a scale of more than 1.6 billion US dollars, and Alibaba, tiger, Softbank and Sequoia participated in the investment.

According to the official wording, after the new round of financing, the homework group will continue to focus on K12 large classes, re invest in education and science and technology, enhance core competitive advantages, expand product categories, increase new business layout, and continuously provide high-quality education resources and services for the society.

In the second half of 2020, there are two reasons for the refinancing of the operation group: first, in the first half of 2019, some head organizations failed to make a move due to schedule or quota factors; second, in 2020, the industry competition is becoming more intense, and the company intends to reserve ammunition to provide support for a more flexible strategy.

The financing competition in 2020 will come to an end, and the smoke of education will continue. Hou Jianbin, founder and CEO of homework group, points out that online education has entered a long-term competitive stage.

They are eager for scale and efficiency. 21st century economic reporter learned that the company's management team is considering reducing the proportion of external advertising, which is due to the transformation ability of the operation group relying more on the internal traffic.

Victory at the beginning of the three wars

In addition to the e-round financing half a year ago, the financing amount of job help in 2020 will occupy the top position in the industry.

As in the past, the operation group has supplemented the company with high-quality shareholders through financing. Like minded investors also responded with enthusiasm. The e + round was supposed to finance less than 1 billion US dollars, and finally expanded to 1.6 billion US dollars.

They believe that China's market is big enough to breed an education company with a market value of 100 billion US dollars, and homework help is in the leading position in the industry; K12 online education is still developing rapidly, and the high growth rate in the next 3-5 years is still expected; the first echelon of K12 discipline guidance has been stable, only the competition among the giants for ranking.

Founded in 2015, the homework group started from taking photos to search questions, gradually improved the product matrix, and transformed into an online education comprehensive platform. Today, it has a variety of educational technology products, such as homework help app, homework help live class app, homework help oral arithmetic app, meow machine, etc., and provides VIP services.

Up to now, the homework group has completed the battle of traffic and live class, and has started a large-scale multi round competition of new and large-scale growth since the summer of 2019.

After the three battles, homework helped to build their own traffic barriers, and also opened the commercial closed-loop of the realization of live class.

In the field of live large classes, homework help is almost the latest to enter the field. Xu Xiaohan's explanation of this is, "until the traffic barrier is built very high, to achieve a complete victory, we do the second thing."

It took only two years to catch up. By the autumn of 2020, the total number of students in the paid class of double normal class will exceed 10 million; the number of students in regular class in autumn will exceed 2.2 million, with an increase of more than 24 times in three years.

At the beginning, "whether we can do live class or not determines whether we are a 10 billion dollar or a billion dollar company today." After the preliminary victory of the Third World War, Xu Xiaohan told reporters.

Building barriers

At this stage, from the perspective of user experience, the categories and service modes of K12 online subject guidance products are similar, but from the perspective of competitive advantage, one of the major barriers of homework help is to obtain customers.

According to the changes in users of homework help since 2019, we can find that the new growth is mainly due to the contribution of internal traffic. 50% - 70% of the newly added positive price course students each quarter come from the internal traffic contribution, followed by the external investment. On the one hand, it proves the value of homework help app's own traffic, on the other hand, it also verifies the possibility of large-scale transformation of tool traffic into course students.

"The part of self owned traffic is basically free." Xu Xiaohan said that the transformation of self owned traffic not only reduces the cost of acquiring customers, but also establishes the competition barrier formed by students and the differentiation of education content.

More than 70% of the students from the third tier and other cities and regions account for more than 70% of the students. Their main needs are synchronization and improvement, not excellence training. This is also a big difference in similar products.

Reducing investment does not mean abandoning scale growth. Some industry insiders told reporters that the students obtained through advertising are basically in the first and second tier, and will not have much impact on the third and fourth tier market share.

On the issue of investment, Xu Xiaohan said that the account of online education industry in the summer of 2019 can still be calculated. By 2020, the investment cost of online education industry will be very high.

"We began to fight with our friends." She recalled that such a launch strategy means that "we will grab as many students as our competitors grab from the market, and then use our own app to increase the total number of students." Thanks to the development of its own app traffic, the overall customer acquisition cost of ABC has always been the lowest in the industry, only half of the industry.

The above strategy lasted for two years, and the homework help achieved high student growth while controlling the cost of customer acquisition.

Looking at the current environment, the supply of capital to K12 discipline guidance field is still abundant, and the head players hold a lot of capital ammunition. On the one hand, under the demand of scale, the choice of large-scale investment to promote growth will continue. On the other hand, both enterprises and capital sides know that only by maintaining effective growth can they really laugh at the end.

"The industry will eventually return to rationality." According to the signal released by Xu Xiaohan in the interview, after two years of pursuit, the operation group intends to slow down the proportion of advertising, but this will not affect its continued leading industry.

The original intention of universal benefit remains unchanged

By the end of 2020, the total daily life of the products under Aobang has exceeded 50 million, the monthly live users have exceeded 170 million, and the accumulated activated user equipment has exceeded 800 million.

"From now on, every battle will be crucial." Xu Xiaohan said in an interview.

It is worth noting that the new round of financing of more than $1.6 billion is still to reserve bullets and provide flexibility for future strategies.

Specifically, homework group will continue to focus on K12 class and continue to explore more product forms. For example, large classes are relatively standardized products. In the future, more personalized products will surely come out to meet the needs of different users with different product lines.

From the innovation of live class products, it has tried the mode of "large class group class" in 2020, that is, through the six person group live class that can be seen from each other, students can have the experience of learning in the classroom at home, so as to achieve the effect of mobilizing the learning enthusiasm of young children.

The capabilities of K12 online tutoring agencies have their own strengths. Xu Xiaohan said, "it is difficult to open a significant gap in product level through single innovation, so it is more testing the ability of continuous innovation and whole chain innovation."

In addition to its commercial value, the social significance of homework Gang is also reflected, which is also a great original intention of Hou Jianbin, founder and CEO of homework group and his team.

Of the 194 million primary and secondary school students in China, only 30% live in the first and second tier cities. For most children living in third tier cities and regions, good teachers, good content and good environment are their needs for educational resources.

According to the data disclosed by the homework group, as of October 1, 2020, more than 3.36 million primary and secondary school students from 52 national poverty-stricken counties (all of which have been lifted out of poverty) have conducted online learning on the platform.

"Online teaching is a new approach, but the inclusive nature of education cannot be changed." In Hou Jianbin's view, the greatest value of online education lies in inclusive, and homework help is speeding up the construction of such a basic pipeline.