Introduction

The first quarter of 2020 is nearing its end. Due to the impact of the Spring Festival and the outbreak, the number of investment and financing events in the education industry is not optimistic. In the “2019 Education Industry Financing Trend Report, Where Did the Money in the Venture Capital Circle Go?” “In the article, we concluded:

Looking back at 2019, the number of investment events in the education industry has greatly decreased in the context of the capital winter. From the perspective of financing rounds, the decline in financing in the early stages was the highest, and the number of rounds of financing in the middle and late stages was affected. small. The field of STEAM is still receiving attention, while traditional K12 education has encountered financing “Waterloo”. Also as the country continues to promote the development of quality education content in the field of science and art, the market for expanding content education after class is on a hot trend, and this trend may continue in 2020.

Under the unfavorable start of 2020, we still see the news of several domestic and foreign children’s programming projects financing. Facing the current difficult industry situation, how can the entire children’s programming industry solve the current problems? What do investors and entrepreneurs think of children’s programming in 2020?

01 Coexistence of pressure and opportunity, head effects appear

As a basic industry for social construction, education has always been deeply affected by policy adjustments. Provinces with programming information technology support policies will also have significantly faster information technology development than other provinces and cities. The reason why children’s programming can be valued in today’s education industry is inseparable from policy support. Since the Ministry of Education issued the “Outline of the National Medium- and Long-term Education Reform and Development Plan (2010-2020)”, corresponding policies have been issued almost every year to support and guide the development of children’s programming.

It is not difficult to see from the policy that today’s artificial intelligence development is increasing the demand for digital talents, and the current teaching model is difficult to meet the requirements of the times in the development of high-tech industries and talent training. New technologies and new talents are out of touch with the current society as soon as they leave college. With the current technological trends and adjustment of industrial institutions, it is imperative to cultivate new IT talents.

As the post-80s and post-90s people enter the stage of marriage and childbearing, these two generations have become an important driving force for children’s consumption. The new generation of mothers ’strong willingness to consume and higher education make them educate children Training is also more important. Children’s consumption is also escalating, and the increase in disposable income has made it possible for new-generation parents to afford high prices and high prices.Quality product. In addition, the internationalization of the parenting concept of the new generation of parents is easier to accept new things, which is also a benefit for the development of children’s programming.

Of the 210 children’s programming companies on the blackboard insight statistics, 139 have no disclosure of financing records. Of the 70 companies that have been disclosed, projects have reached the B and C stages, and each financing The number of companies in this phase has gradually widened the gap. From the perspective of the Matthew effect, there are already some projects running out in this industry. The effect of the head company is obvious. The latter companies (especially those without any disclosure of financing records) cannot polish their business models. If stable cash flow is used to support it, it will be difficult to get money, which will also cause the company to lay huge hidden dangers in the subsequent operation stages.

Especially in the face of the uncertainty brought about by the epidemic, the entire industry is actively self-helping, and even in the process of transformation, it will still face great risks. This is not only the way of teaching online and offline. The changes also include a series of changes in teachers’ teaching habits, parental user identity and so on. In the short term, the industry is facing great challenges, especially for small and medium-sized enterprises. 2020 may be a decisive year for children’s programming track companies.

02 Children’s Programming from the Perspective of Capital

In order to understand more fully how the capital market sees children ’s programming on the track during the epidemic, and what impact it will have on the industry in the future, we have conducted in-depth communication with several investors:

For a long time, as long as the word “programming” was included in the BP title, the investor returned “don’t watch” in seconds.

—— Li Qingfang, Investment Director of Zhongguancun Education Investment

Although it has been several years since children’s programming relied on robot training and other forms, I personally believe that children’s programming has been released since the State Council issued the “New Generation Artificial Intelligence Development Plan” in July 2017. Really started the development of the programming track.

Capital was crazy in 2017 and 2018. In the second half of 2017 and the first half of 2018 alone, the capital invested by 10 of the programming companies reached 1 billion US dollars. Of course, capital has promoted / affected the rapid development of programming in the past period of time, but the real benign development of programming still has a long way to go. At present, there are still three temporarily unsolvable problems in the field of programming-customer acquisition costs. High, no standards for evaluation, and serious homogenization of courses. In the final analysis, the ultimate test and need for the development of a programming company or programming industry is the company’s ability to make blood and sustain its profitability.

The programming industry for children has been in the process of shuffling in recent years. From mid-2018 to 2019, many reasons such as “capital help” and “seemingly running out of head brands” have made many investors “run when they smell programming”.For a long time, as long as the word “programming” was included in the BP title, investors would reply in seconds and “don’t watch”, especially early investments. But after the development in 2019 and some changes in the programming industry during the 2020 epidemic, entrepreneurs and investors can look at the industry more rationally; in 2020, the reshuffle of the children’s programming industry will continue.

During the epidemic, education or online education seems to have received a lot of benefits, but it cannot be generalized. The new coronavirus is a disaster for everyone and all businesses. The so-called online education “good” is nothing but “a short-term swarm of users”, on the supply chain side, on the effect side, on teachers, equipment , Platform, etc., there is still a long way to go.

Of course, it is undeniable that the epidemic has played a certain role in promoting the rapid development of online education, but for the long-term and stable development of online education, it is still necessary to follow the most basic judgment standards such as “just need, effect, stability” And industry development laws. Of course, the education industry itself is “counter-cyclical”, so compared to other industries, during the epidemic, the overall impact on education was relatively small.

I personally think that the capital market is still relatively rational. I will not focus on some industries / enterprises madly because of the short-term growth of some companies / industries, and I will not abandon an industry because of the short-term impact of a disaster. Or take it lightly. Entrepreneurship itself is a marathon with various hurdles, and the epidemic is only one step.

Children’s programming, especially the need for online large class lessons, was more stimulated during the epidemic. On the one hand, programming that combines offline with robots or makers has to turn to online; on the other hand, one-to-one on-line results in insufficient teacher force and has to seek a better “online one-to-many” Solution; so during the epidemic, it will promote the online big class of children programming. Of course, short-term retaliatory rebound after the epidemic is not ruled out. After that, I believe that children’s programming will, like many educational fields, move toward a rational development trend of a better blood-making profit model such as the “combination of online and offline” model.

Good companies with a proven business model and sustained and healthy development will run out, eliminate bad coins, and the entire industry will return to a state of turbulence and upsurge

—— Zhang Beini, Operating Partner of Qingliu Capital

In the past one or two years, children’s programming is indeed a hot new track. It is relatively easy to be favored by the capital side, and even overheated, so there will be thousands of companies with large and small strengths. At present, with the frequent introduction of national policy support for programming education, and the domestic demand gap for artificial intelligence talents is still expanding, which has also led to the growing consumption of programming education as a consumer group such as parents and students, so We judge that the survival status of the children’s programming industry will still be good for a long time in 2020 and beyond.

But with the long-term development, we hope that one thing that is bound to happen is that the children’s programming industry will develop after a period of time. After the market slowly calms down, it will run out of business models to be verified and continue to be healthy. With the development of good companies, many bad coins are eliminated, and the entire industry will return to a state of disorder. At present, due to the lack of a complete system content and sufficient teacher supply in the downstream of the domestic industry chain, it is difficult to scale and guarantee the quality of teaching, high user acquisition costs, short life cycles, poor retention, and fierce competition in offline channel wars, and gradually in the Red Sea; Fewer players focused upstream on tool development.

In 2020, the emergence of this epidemic is a crisis for many companies. Of course, there is a large influx of traffic in the online education industry, but it is also a test. It was a big wave of sand.

The children’s programming industry is also a new track in online education. Because of this epidemic, it will enter the perspective of more consumers. But in the face of a large influx of traffic, is the company prepared and can it continue to produce? It will bring higher educational value to users. It may be verified in this epidemic. Good good horses must be those who have spent a lot of time and made adequate preparations in advance, can develop healthily in the long run, and can continue to bring high value to users. Contrary to companies with good experience, companies that are not prepared or are currently not so healthy will also expose problems and then gradually exit the stage.

During the epidemic, the outbreak of traffic also brought a huge technical test to most of its underlying technology architecture

—— an investor who did not want to be named

Affected by the epidemic, the field of online education has experienced explosive growth, mainly benefiting two types of education programs. One is a company that is engaged in online education itself, including the good future of the head, New Oriental, VIPKID, etc .; the other is a company engaged in education informatization. Such companies provide the ability to build online platforms for offline education institutions. During the entire epidemic period, especially during the Spring Festival, many companies began to receive new orders frantically, but in fact, the burst of traffic in this process also brought a huge technical test to most of the underlying technology architecture.

From the user group, this epidemic has allowed online education institutions to better penetrate the sinking market, but having users does not mean that users can be retained, so for most investors, whether they are looking at online Education companies are still going to look at those education informatization projects. They all need to look at the overall survival and transformation of the epidemic.

The impact on the field of children’s programming should actually be viewed from the perspective of the project form. It has a relatively large impact on offline programming education institutions. Most offline education institutions are in the process of transitioning online. To generate the corresponding information expenditure costs, and online courses currently seem to be discounted, so even after completing offline to online work and no customers in the middleHousehold losses will still have a greater impact. But for educational institutions that were originally online, the overall situation is relatively good.

03 From business model battle to product matrix battle

Kindergarten, elementary school, and middle school students are the core target users of programming education. According to statistics from the Ministry of Education, in 2015, the number of people in these three groups was about 183 million. According to the “2017-2023 China Children’s Programming Market Analysis and Forecasting Research Report”, the current programming penetration rate of children in mainland China is 0.96%, and it is estimated that each person will spend 6,000 yuan in programming training every year. A rough estimate of the current domestic children’s programming market size Ten billion or so. With each 1% increase in penetration, the overall market size is expected to increase by 10 billion.

Facing the scale of the future development of the track, the creator of the programming cat Li Tianchi also expressed his thoughts: “In the past few years, children’s programming has become more and more favorable in terms of policies and the business model has become clearer. Last year there was some repetition in the industry. In fact, it is not the industry that changes, but the number of participants. From a few companies in 15-16 years, it peaked in 18 years and dropped in 19 years. It is a curve that rises first and then falls. This year’s market has shown The Matthew effect that brings obvious resources to the head. In 2020, the policy will be further favorable. In the past two months alone, there have been relevant documents on the popularity of programming education in Henan, Hebei, and Sichuan.

In the business model, various mature and efficient models verified by K12 can be reproduced in children’s programming: offline small classes, online large classes, online small classes, and so on. Under homogeneous competition, there is no way to generate profits. Therefore, my judgment is that 1, K12’s online large class market competition continues this year, and the cost of online customer acquisition continues to rise after the epidemic. (The cost of special reasons decreased briefly during the epidemic.) 2. The competition among the head agencies of children’s programming agencies will switch from a business model dispute to a product matrix dispute (all effective business models will involve each other). The competition is the team’s ability and organization. Ability. “

He believes that the variables for children’s programming this year are mainly in two places: One is whether it can be connected inside and outside the school, and the second is whether it can be integrated online and offline. This will determine whether the efficiency of children’s programming agencies can be ten times that of the industry. Average. At the same time, artificial intelligence education procurement projects in public schools will have great opportunities this year.

How will the capital market view the education market during the epidemic, and what impact will it have on children’s programming? Li Tianchi said: “This epidemic has brought suffering to our country and the people, and has caused a great blow to the economy. Under this fact that cannot be changed, the impact of the epidemic on overall quality education is analyzed. Popularity and embrace on the Internet. Online is a big trend, and offline cannot be separated. In the future, OMO (online merge offline) online and offline integration is the general direction.

The epidemic has unexpectedly completed the online process of all 200 million primary and secondary school students, especially in the sinking market. After the epidemic, online education will accelerate. The impact of the epidemic on the line is limited, and more challenges lie in organizational capabilities and remote assistance. The office capacity in the epidemic situation poses a great challenge to the offline programming and robotics education industries.

In the final analysis, no matter what form of education, the purpose of education is for the future of children, and how to make different education forms fully take advantage of their future and integrate them perfectly in order to produce greater social utility and energy It will be an issue that education practitioners will focus on in the future. “At this stage, whether it is for children’s programming or other educational fields, it is the top priority to do a good job of serving existing users.” Li Tianchi said at the end.

Conclusion

The track competition for children’s programming has gradually entered a stage of fierce heating. Before the blackboard insight, the analysis report on the track for children’s programming has pointed out that if the companies on the track cannot polish their business models, there is no stable cash If it comes to support, it will be very difficult to get money and even die in the next cycle of economic downturn. It’s just that we didn’t expect this cycle to come so suddenly.

At the same time as the impact of the epidemic on online education institutions, we should also see that more and more standardized requirements will promote the positive development of the entire industry. The policy is becoming stricter, and each track will be gradually standardized and systematic. The development of children’s programming is still in a state of capital leadership today, and the industry is developing in a larger, better and more comprehensive direction.

In order to develop for a long time on the track, to cultivate intensively, it is the main trend to cultivate internal strength. External high-quality resources can promote the positive development of education companies, but user recognition is the core guarantee for sustainable development. Technological changes have led to the systematization and institutionalization of the education industry.In addition to the expansion of the volume, it has also brought better services and effects, as well as the regularization of company operations. This in turn has brought more peace of mind to consumers And safety.