Extracurricular education is big business in China.
One futuristic example: Yuanfudao, an online tutoring platform that includes an app that uses artificial intelligence to give students answers to their homework after they snap a photo of it.
Yuanfudao claims it now has 200 million users, and that interest from parents and students has translated into major interest from investors. If it lives up the hype, it could represent a new path forward for educational technology — not just in China but for students across the globe.
On Tuesday, Yuanfudao announced another $300 million in funding, bringing its valuation to more than $3 billion. Chinese social networking and gaming giant Tencent led the round, with an international squad of investment firms including Warburg Pincus and IDG Capital also joining in.
Yuanfudao told TechCrunch it plans to use these funds for AI research and development, and to improve the user experience of its homework app.
Practice Makes Perfect
While being able to snap a photo of your homework and instantly get answers to problems sounds like a lazy student’s dream come true, the homework app actually isn’t Yuanfudao’s main moneymaker — the company told TechCrunch most of its revenue comes from selling live courses.
Rather than using the app to get out of doing their homework in the first place, it’s more likely that Chinese students use the app to check that their homework answers are correct. After all, the ultimate goal of paying for Yuanfudao is to improve exam scores, so skipping out on doing the homework that prepares a student for those exams would be counterintuitive.
Chinese parents probably wouldn’t be too happy about that use of the app, either. All told, they spend an average of $17,400 every year on extracurricular tutoring for their children — and based on Yuanfudao’s latest round of funding, investors are as willing to pump money into tutoring companies as Chinese parents are.
READ MORE: Tencent-Backed Homework App Jumps to $3B Valuation After Raising $300M [TechCrunch]
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