Deals | China’s Largest News Aggregator Toutiao Leads $200 Million Investment in Education Startup 17zuoye

Internet traffic giants venture into online education sector for business expansion

Image credit to Visual China.
  • 17zuoye have already covered 80,000 middle and primary schools in China.

  • Tencent and Baidu have also stepped into the education sector.


Toutiao, China’s largest news aggregator, recently led a $200 million investment in online parent-teacher-collaboration platform 17zuoye (一起作业). Designed to bring closer teachers, students and parents, the platform is now valued at more than 1 billion yuan, according to multiple independent sources of 36Kr, China’s biztech media and also Kr-ASIA’s parent.

Earlier data released by 17zuoye shows that as of September 2016, its K12-oriented services, mainly targeting the learning of Chinese, mathematics and English, have already covered 80,000 middle and primary schools in China. Up until 2017, over 50 million users have registered on the platform, including more than 30 million students.

China's Largest News Aggregator Toutiao Leads $200 Million Investment in Education Startup 17zuoye
Image credit to Visual China.

The funding is 17zuoye’s first financial move after its Series D in three years, during which the platform stepped up its education-centric efforts, including:

  • Launch of UStalk, an online one-on-one tutoring platform, featuring North American teachers, in alignment with VIPKID – an online English teaching company targeting children;
  • Acquisition of Kuailexue (快乐学), which is an online education platform that helps boost the performance of junior and senior high school students in their daily homework, weekly tests and major examinations. By bringing Kuailexue into the picture, 17zuoye is able to extend its reach beyond tutoring primary schools students in afterschool homework: Kuailexue mainly provides customized solutions for tutor junior and senior high school students in the study of sciences, with a focus on evaluating their performance in daily homework and exams;
  • Upgrade of Jiazhangtong, an instant messaging app that updates parents on their children’s curriculum-related performance. Grouped by class, parents now can keep up with the trend of education and engage in community-based discussions.

Most question bank-centered products expand their user bases in the frequent “exercises” and monetize the massive internet traffic through the sales of third-party and company-programed courses. 17zuoye is no exception: it solicits subscribers for UStalk and third-party pay-per-click tutoring services.

China's Largest News Aggregator Toutiao Leads $200 Million Investment in Education Startup 17zuoye
Screenshot from 17zuoye.

Compared with other homework-centric products directly oriented to customers, 17zuoye gains the upper hand with its business-oriented strategy: on one hand, it aims to solicit parents who are willing to pay for computer-assisted teaching and learning services. On the other hand, 17zuoye introduces itself into schools through offline promotion and free-of-charge services.

The recent investment in 17zuoye is not Toutiao’s only attempt to extend its presence into the education industry. According to sources inside the company, the news aggregator is incubating a slew of customer-oriented products benchmarked against VIPKID’s one-on-one foreign teacher tutoring, VIPCODE (programming courses for children) and AI chatbot.

Without relevant experience, Toutiao still manages to prove itself in the promising sector. According to Corinna Chen, general manager of Marketing Center, the number of business partners engaging in education cooperation with Toutiao soared by 263% from 2016 to 2017.

Internet traffic is considered a highly effective tool of business expansion in the era of big data. As an algorithm-savvy tech company, Toutiao needs to adapt technologies to application scenarios. However, customer loyalty necessitates content and service in the application of technologies on education products.

Technology, a new variable more and more frequently spoken of since the boom of online education, happens to be Toutiao’s strong suit.

Whether in online education or AI-aided education, technology helps drive the development of these industries and optimizes the forms and efficiency in dissemination of content. The inevitable trend in online education – constant integration of technology with content, is growing strong on daily basis.

TAL (好未来), China’s education frontrunner listed in NYSE, launched its AILab at the end of 2017 to develop AI-related products and solutions. In addition, TAL is looking for opportunities of investment in technology, which may be interpreted as the content tycoon’s attempt to make a difference in the technology sector.

“Core technologies and core data are the most fundamental cornerstone of artificial intelligence. However, the combination of the two calls for application scenario. If a company is able to outperform its peers in a particular segmented scenario, it might be a unicorn in the making. ”CHEN Lijiang, founder of education startup Afanti (阿凡题), pointed out at WISE 2017 Neo Business Summit.

Although technology is essential to the development of education, it is believed to be unable to topple the line of work. With entrepreneurial opportunities presenting themselves one after another, high-caliber innovative content and service still come first in online education.

In such context, as their customer-oriented attempts failed, the internet traffic giants shift their focus to the business-oriented sector for stable returns. For example, Tencent introduced ke.qq.com and class.qq.com (education platforms), fudao.qq.com (online tutoring), campus.qq.com (on-campus service), weixiao.qq.com (third-party service). Joining Tencent is Baidu and its study.baidu.com targeting the market share of public schools. Toutiao, with 17zuoye being its stepping stone, might tear down barriers to entry in the public education sector.

Read more about Toutiao, China’s lesser-known tech giant beyond its home country: 

Toutiao Reportedly to Produce Drama and Variety Show, Adding Youku and iQiyi to Competitors List

China’s Toutiao to Further Beef up Global Presence in 2018

Writer: SI Qi