One year since Chinese authorities introduced the “Double Reduction” policy, which implemented tight restrictions on tutoring services, investment in the country’s private education industry has sharply declined. However, according to information released on September 15 by investment database ITjuzi, Tencent has continued to invest in education startups in Nigeria, Austria and other overseas markets this year.
Tencent ranks among the top five active investors in China’s education industry, and has even surpassed New Oriental Education. In terms of the scale of its investments, Tencent has spent more than 10 billion yuan ($1.43 billion) on the education field during recent years.
ITjuzi’s data show that Tencent started to invest in education companies in the second half of 2014.
From the perspective of investment frequency and amount, Tencent was relatively active from 2018 through the first half of 2021. The company invested most in the second half of 2019 to the first half of 2021. Although the pandemic has hit the offline training sector, it has been beneficial to online education. Therefore, Tencent has invested in digital tutoring platforms such as Yuanfudao and Spark Education.
However, after the official release of the “Double Reduction” policy by the Chinese government in the second half of 2021, Tencent‘s enthusiasm for education investment dropped sharply. Since then, Tencent has stopped investing in firms involving in K12 training, and has only invested in vocational education company Miaoke Technology and home-school interactive platform Go-High Technology.
Tencent has also shifted the focus of its education investments to broader overseas markets such as Europe and Africa. In the past year, all three of Tencent‘s investments in the sector targeted overseas education projects.
In December 2021, Tencent participated in the $15 million round-B financing of uLesson, a Nigerian educational technology startup. Founded in 2019, uLesson is committed to providing high-quality and affordable education services for primary and secondary school students in Africa through technology. Students can access courses through streaming, or by downloading and storing them using SD cards. After that, uLesson added functions such as tests, homework, and group livestreaming.
At the beginning of 2022, Tencent participated in round-D financing totaling $340 million for GoStudent, an Austrian educational technology unicorn. The firm, which was founded in 2016, is now valued at $3.4 billion. Its platform can match the tutoring needs of students aged 6 to 19 with their corresponding teachers. The company adopts a subscription mode by selling services to parents on a monthly basis, deducting part of tutoring income as commission.
In June 2022, VC Alchimia and Tencent jointly led $6 million round-A financing in Kukua, an African education and entertainment company. Kukua was founded in 2015 and is jointly headquartered in Nairobi and London. The firm has also created an animated superhero series called “Super Sema.”
According to data from ITjuzi, Tencent has invested in 56 education companies, 49 of which are domestic education companies. Among them, there are nine companies that once ranked as unicorns. After the commencement of the Double Reduction policy until now, Tencent has held only three domestic educational unicorns and three overseas educational unicorns.