In December, many prestigious education service providers such as GSX, Yuanjiao, Homework Help, and TAL have successively financed from investment funds. Many well-known investment funds continue to increase their investment in the education industry.
According to the statistics from Tianyancha, over RMB 10 billion of capital were invested in the education industry in the first half of 2020, especially in K12 education sector. The total capital invested in K12 education in 2020 has exceeded the total investment of the past decade. The education industry is one of the few industries with high growth, strong demand and anti-cycle in China, and has a large market growth potential. China’s education industry is in an expansion stage in terms of both overall size and market activities.
In 2020, many education service providers’ offline centers or schools were forced to close or suspend due to the COVID-19 pandemic and their financial performance and market valuation were negatively affected accordingly. As the pandemic gradually stabilized and vaccines are invented, the capital market is more like to invest in those segment leading companies with significant competitive advantages, steady financial performance, strong brand awareness and clear growth strategy.
Although the COVID-19 pandemic has affected the operations of many education service providers, it has also accelerated the integration of the industry. The top players in the industry such as Meten EdtechX have further increased their market share in the adult English language learning market, which enables them to have strong pricing power. In addition, according to the financial performance of Meten EdtechX in the third quarter of 2020, the junior education segment and online education segment in the third quarter have developed rapidly, and the performance of junior education segment has exceeded the level compared to the same period of 2019. With strong management capabilities and active cost-effective measures, Meten EdtechX’s operations have gradually resumed, and will continue to enhance the new business segments such as the junior education and online education.
