This article comes from: Blackboard Insight (WeChat public ID: heibandongcha), cover from: Visual China
preface
In 2018, it was called the turning point of the education industry. From the second half of 2018, the policy environment was tightened and the capital market became increasingly cold. Despite the cold investment in the big environment, reviewing 2019, education is still cultivating new opportunities due to its inherent countercyclical nature, as the external environment becomes colder. At the same time, under the strict supervision of the policy and the elimination of the market, the whole industry will also begin to enter the stage of development and maturity. The funds have accelerated to the head sector, and the fast-growing education industry has begun to enter the stock game and the era of the strong and strong.
In order to review the 2019 education industry’s memorabilia and look forward to the investment and financing trend of the education industry in 2020, on November 14, Beijing Business Daily and the Blackboard Insight released the “2019 Online Education Industry Big Data Report”, which is policy-oriented. Starting from various dimensions such as investment and financing trends and corporate dynamics, the industry development map of online education in 2019 is fully presented.
(Note: The amount of the undisclosed financing amount is not statistically calculated according to the convention. For the convenience of statistics, we calculate the amount according to the rule of taking the intermediate value – Millions of financing will be calculated by 3 million yuan; tens of millions of financing will be calculated by 30 million yuan; in addition, for the sake of conservatism, we will take 6 million yuan to calculate, and nearly 10 million US dollars will take 6 million US dollars or 36 million yuan. Calculated; 10 million refers to 10 million; nearly 100 million refers to 60 million; over 100 million refers to 100 million yuan. Attachment: financing time is calculated by media disclosure time. The statistical time of this report is until October 31, 2019)
I. Analysis of annual financing situation
(1) The amount of investment is back, the capital market returns to rationality
A total of 263 investment and financing events occurred in the education industry from the end of 2019 to the end of October, excluding the undisclosed amount, totaling 16.691 billion yuan. Compared with the amount of 548 in the same period in 2018, it has shrunk by nearly half. From the perspective of financing rounds, investment in online education is still dominated by early stage. In 2018, round A and previous financing accounted for 69% of the overall financing. After the A round, the middle and late rounds accounted for 31% of the total, and in 2019, the rounds accounted for 35% in the middle and late October. Compared with 2018, the industry’s financing rounds have shown a downward trend, the capital market has returned to rationality, and investment has been biased towards development and maturity.
(2) The amount of financing continues to expand, and the industry is heading towards the stage
Compared with 2018, the amount of financing in 2019 has expanded, and the large amount of financing above 100 million has a growing trend. As of the end of October 2019, the average financing amount of RMB 100 million was 430 million, and the proportion of the total scale increased from 8% in 2018 to 15%; while the ratio of the size below the million yuan to the total scale decreased significantly from last year’s 30% fell to 22%, and in 2019, the amount of financing was above several million, and there was no volume of about 100,000. The emergence of large-scale financing in the industry, on the one hand, shows that capital is sought after by star companies, on the other hand, it means that the industry is going to the late stage of growth and entering the stage of competition.
(3) Large-scale financing emerges in the middle and late stages, and the head effect is expanded
Overview of the TOP10 in the financing field, all of which focus on financing after the C round, the K12 field’s ability to absorb gold is not reduced, occupying the top five of the entire financing amount. Among them, the $350 million E-1 round of financing completed by one-on-one in February almost doubled the total amount of financing for the month, which is the maximum amount of financing for the K12 online one-on-one general counseling track. Quality education and early childhood education have also received great attention. Under the background of large-scale capital expansion, 80% of large funds have flocked to the head company. More and more investors said that the investment will become more and more attractive. The profit model and market share of the education company also means that the head effect is further increased.
In the financing incidents that are worthy of attention, VIPKID was awarded the E round of financing by Tencent in October, becoming the 10th round of financing since VIPKID was established in 2013. As the most highly valued online education unicorn, VIPKID’s financing progress can largely reflect the attitude of the capital market to the online education industry, experienced a high-explosion, high-growth capital boom, and is now a new brand for online youth English track. The possibility of breakout is small, capital is more concerned about the enterprises in the middle and late growth period, and the era of barbaric growth in 2018 is over. The industry will begin to enter the stock competition stage after supervision and capital tightening.
(4) Segmentation: Quality education has sprung up and become the main theme of the early track
In terms of the quantity and scale of investment, quality education has surpassed K12 in one fell swoop and has become a relatively fragmented field of financing. Since May 2019, quality education has continuously occupied the top of monthly financing, becoming the main theme of early education investment. The reason, the brand and education that has begun to take shape in this field
(6) 2019 education industry listed company
Compared with the listing of education companies in 2018, there was a lot of restraint in 2019, but many companies still performed well. In February, the “Zhonggong Education”, which was successfully listed by Yaxia Automobile, became the first share of vocational education. The opening price was 9.7 yuan and the market value exceeded 59 billion yuan. As of mid-October, the market value has stabilized over 100 billion, becoming the third largest education giant in China after New Oriental and good future.
When the US stock market went public in June, it became the first K12 online education company to achieve profitability after the first round of financing, and took the lead in running the online live broadcast large class mode. In its latest disclosure of the third quarter earnings report, who learned 2019 Q3 cash receipts of 880 million yuan, 5.2 times the same period last year; cash receipts and operating income have maintained a four-fold growth rate. Q3 operating income increased by 461% over the same period, and per capita income was higher than the same industry.
On October 25, NetEase, which officially landed on the New York Stock Exchange, became the first independent spin-off company of Netease. It also marked the leading position of Netease’s education business asset securitization, such as BAT and other Internet giants.
II. Education industry trend analysis
(1) rapid market growth
Since 2018, the National Education Policy has been established one after another, and the implementation of the burden-reduction actions and related supporting policies have been closely implemented to further standardize the off-campus training market and to promote the development of online education. The continuous overweight of the burden-reduction campaign has brought new development space for online education.
The rapid development of technology and the possibility of online education brought about by the increase in bandwidth rate have greatly improved the online learning experience and effects.
The upgrade of parental education awareness and the improvement of spending power after the new generation of 80/90,Online payment awareness has gradually developed. After 00, the child’s natural familiarity with the Internet, the increasing acceptance of online education, and the possibility of online education ushered in the growth of a large number of users.
The new demographic dividend has also created new opportunities. The legal two-child born by the national second-child policy has entered the education stage and new urban opportunities brought about by population movements. The birth rate of first-tier cities and their surrounding areas has been growing positively. The promotion of urbanization has shifted from first-tier cities to the surrounding areas of urban agglomerations. The influx of migrants has led to the growth of fertility in these first-tier cities, and the increase in income has brought A new batch of potential customers.
(2) National Education Financial Support, Policy Steering
Education Relations National economy and people’s livelihood have public service attributes, and the state has the responsibility to avoid the commercialization of education and provide basic education services to the broad masses of the people. Every year, the government is investing more and more money into the education industry to guarantee the financial investment of 4% of GDP per year. In 2017, the country’s largest fiscal expenditure was 3 trillion yuan in education expenditure (15% of total fiscal expenditure of 20 trillion yuan, 3%-4% of GDP). In 2018, the total investment in education in the country was 4.6 trillion yuan. The 4.2 trillion yuan of the previous year increased by 8.41%. The state’s fiscal education funds were 369.957 billion yuan, an increase of 8.15% over the previous year’s 340.275 billion yuan, accounting for 4.11% of GDP. This is more than 4% for the seventh consecutive year since it was more than 4% in 2012, and the 4% results have been further consolidated.
(3) Third- and fourth-tier cities will become the focus of future educational institutions
Under the premise of supply quality assurance, the key to defining the size of the business is the size of the user. The market has become a competition point for educational companies. As the market in the first-tier cities such as Beishangguangshen and Shenzhen became more saturated, the cost of passenger drainage increased sharply. Compared with the first-tier cities, non-first-tier cities have higher cost performance and the market size is huge. More than 70% of the people in the country are sinking. In the market. With the rapid rise of non-first-tier cities, parents have gradually paid more attention to their children’s learning. Their share of education expenditure in household consumption structure has gradually increased. Parents’ demand for education has begun to catch up with first-tier cities. Further improvement. Coupled with the maturity of online live broadcast technology and the further popularization of the dual-class classrooms, the sinking of teachers in first- and second-tier cities has further boosted the educational development of third-tier cities, and more and more educational companies have moved their businesses to non-first-tier cities.
three, industry development
(1) Segmentation changes, quality education track is concerned
The external competitive environment is changing, and new internal industry trends are emerging. The diversification of selection has brought about the opportunity of quality education segmentation industry. Under the call of policy reduction, since 2019, quality education has gradually surpassed the K12 track, focusing more and more attention.
Quality education refers to an educational model that aims to improve the quality of all aspects of the educated. It attaches importance to people’s ideological and moral quality, ability development, personality development, physical health and mental health education. It includes not only Chinese studies, eloquence and other disciplines, but also sports training such as sports, music, painting, dance, and chess. There are also popular extracurricular projects such as study tours and camp education in the past two years, as well as science and technology projects such as robotics and programming education. Among them, the number of financing events and the amount of financing in the field of science and technology education far exceeds other fields, attracting the attention of many capitals.
As a representative track in the field of quality education, programming education can be described as a wind and water.
In terms of policy, in 2019, the Ministry of Education issued a notice clearly stipulating the promotion of artificial intelligence classes in primary and secondary schools.Cheng, gradually promote programming education; Zhejiang Province has added “Python language programming” to the college entrance examination candidates; Shandong Ministry of Education also added programming content to the sixth grade textbook.
From the perspective of demand, programming education is conducive to further studies, and it is a discipline with strong curriculum continuity in the field of quality education. It is possible to develop into a new type of mathematics course.
At the same time, capital is also optimistic about the discipline. According to public data, there are currently more than 200 children’s programming companies on the market. According to the blackboard insight statistics, in 2015, 19 new programming children’s enterprises were newly incorporated in China. In 2016, there were 24, and in 2017, there were 42. By 2018, 34 were registered in the first half of the year, which is equivalent to the registration of a children’s programming company almost every 6 days.
In addition to the popularity of education informatization and the application of AI technology, programming education may become a common basic technology for a long time in the future, and its user base will also be extended to all ages, reaching hundreds of millions. Magnitude.
(2) Under the policy tightening, the education and training industry will move toward compliance
The comprehensive implementation of the policy has brought about the continuous reshuffle of the entire education industry. Under the strict supervision of the policy and the elimination of the market, the whole industry will also begin to enter the stage of development. Short-term pains have led to increased compliance costs and increased cash flow pressures. Due to the lack of front-end traffic and the back-end services, the disadvantages of qualifications and management efficiency will be completely exposed, and it is difficult for them to reach the end. After years of development, the head company has sufficient funds to minimize costs, invest a lot of time and energy to polish the teaching staff and teaching products, will be more standardized, and will enjoy more industry benefits. The fast-growing education industry has begun to enter the stock game and the era of the strong and strong.
Education Industry Policy in 2019:
1, January, the Ministry of Education issued the “Notice on Prohibiting the Entry of Harmful APPs into Primary and Secondary Schools”, clearly stating that it is necessary to strictly examine the learning APIs that enter the campus, and prohibit the study-based APP that has not been filed for review on campus. use.
2. In January and January, the General Office of the State Council issued the “Notice on Carrying out the Governance of Supporting Kindergartens in Urban Areas”, stating that the supporting kindergartens in the community should be run by the education administrative department, or entrusted to be a public welfare park. It is not allowed to be a for-profit kindergarten.
3, JanuarySense China