Recently, the media said that Vipkid is struggling to raise 500 million US dollars, with a target value of 5.5 billion to 6 billion US dollars. Only a year has passed since the successful financing of Vipkid.
Last June, from the US well-known hedge funds Coatue, Tencent and Sequoia and other investment institutions to raise $500 million D + round of financing, refreshing the global online education track with the highest financing record, becoming the only educational startup in China with a valuation of more than 3.5 billion US dollars.
Six years ago, at the age of 17, Mi Wenjuan, who was in the English education industry, founded the company to connect North American foreign teachers and Chinese children aged 4-12 with an Internet platform. One-to-one English training was provided by video, more than 160 yuan. More than 20 minutes of single-course price, mainly aimed at first- and second-tier primary school students.
According to official data, Vipkid currently has 60,000 teachers in the United States and more than 600,000 students in China.
Over the past year, Vipkid has continued to grow its growth story from one-to-one extensions to small classes, interdisciplinary to mathematical thinking, and the capital market has not paid a valuation premium for its transformational story. The enthusiasm of Chinese parents to urge their children to learn English has deeply touched investors, and now the latter is a bit calm.
Since the beginning of this year, the total amount of financing for the educational track has become smaller, and a single large investment has decreased. 36氪 The recently released mid-year venture capital report said that there were 184 financing events in the education field in the first half of this year, with a transaction amount of 11.2 billion yuan, accounting for 6.6% of the total financing amount in the primary market, even the number one medical health industry. Half is not there.
The halo fades, and the Vipkid problem gradually emerges. The eye is about to touch the ceiling of the online English track in the children. The goal of 3 million students is difficult to achieve; the cost of obtaining passengers is far from high, and it will sink to second and third tier cities. Expanded; madly rushed to 20 billion in 2018, but failed to make a profit These are the main reasons for the cold of financing.
xxClose to the market ceiling
Compared with the traditional offline one-on-one and small classes, the online one-on-one class is flexible and convenient, and has a certain price/performance ratio. The future growth momentum comes from policy support, user acceptance of onlineization, and awareness of English quality education.
In 2018, China's K12 education (basic education) has an online scale of 26 billion yuan, and the current online rate is 7%. Among them, the online English education scale is 17 billion yuan. Subdivided into English language training (non-test, Vipkid market segment), the market size is about 14 billion yuan, the potential market size is 44 billion yuan, and the growth space is relatively limited.
The market is concentrated in the head, and the top four share of the industry is more than 80% concentrated. Because parents can not effectively assess the quality of training, mainly through the brand awareness, acquaintances recommend to understand online children's English training platform, audition platform teachers, word of mouth and cost-effective as the key elements of purchasing decisions.
At present, the penetration rate of Vipkid is close to saturation. As the number one brand, Vipkid is favored by parents.
In the market for users aged 4-12, Vipkid's current share is 65%, mainly in first-tier cities. It is expected that the market share will continue to increase to 70% by 2023, and the space for improvement is limited, mainly from second- and third-tier cities. Cities in the third-tier and below are expected to have lower penetration rates in the future, less than 5%.
The logic behind the Vipkid D+ round of valuation is that in the next two to three years, the one-to-one size will exceed 3 million, and the number of students in a one-to-many mode will exceed 3 million. According to the above permeability prediction, this growth target is difficult to achieve.
In August 2018, Vipkid first disclosed its other five major brands, including overseas Chinese learning for children, online English 1 to 4 small classes, and 9-12 year old youth classes. In March 2019, Vipkid first crossed the field of mathematical thinking.