Editor | Feng Yu
Production | project financing
Liu Chang, the founder of Xiaomi Lei Jun, who is praised as "faultless", will lead the educational technology he founded to ring the bell at the Hong Kong Stock Exchange.
According to LatePost, together with education technology (hereinafter referred to as "education together") is preparing to go public and is currently in contact with brokers. It is expected to land in Hong Kong stocks on 202 1. If it goes well, together education will become the second online education enterprise to land in Hong Kong stocks after New Oriental Online.
Previously, education together was once the darling of capital chasing. In less than seven years, it has obtained six rounds of financing, maintained the rhythm of one round a year, and assembled well-known investment institutions such as Tiger Fund, H Capital, Shunwei Capital and Zhenge Fund. Shunwei Capital has increased its holdings of education five times in a row, which shows that the former is optimistic about the latter for a long time.
As for the reasons for listing, many online education practitioners and investors told Bullet Finance a common answer-listing "circle money".
Of course, such an answer is easy to understand. The word "capital" cannot be avoided, whether it is difficult to realize the business of entering the school together or the company's off-campus business is in urgent need of new breakthroughs.
"Education together really started the listing plan." Zhou Bin (pseudonym), an industry insider who has been engaged in online education of K 12 for many years, told Bullet Finance that he learned the news from his friends who worked in the company, and his circle had been talking about the listing of the company some time ago. "In fact, as early as the beginning of this year, An Education has been reported to be listed." He said.
However, this listing rumor has not caused extensive discussion in the industry and media circles.
In fact, the listing of education together is quite "forced".
"It has a strong demand for funds." Zhou Bin analyzed that from the industry point of view, head players are engaged in an arms race, and education needs enough funds to compete with it. And through the listing to obtain funds, the cost paid by enterprises is undoubtedly lower.
In addition to the demand for funds, education also urgently needs to win the online education card war.
Zhou Bin believes that Education Together wants to achieve the goal of jumping from the second echelon to the first echelon through listing. "After all, listing can not only bring funds to enterprises, but also enhance the brand influence of the company among partners and parents." He said.
Different from the views of practitioners, investors first take "helping capital cash out" as the driving force for listing together.
"Capital has a demand for cash, especially early-stage funds." Xu Hua, a senior investor in the Internet education industry, admitted to Bullet Finance that according to industry practice, fund investment companies can only sell some old shares to external investors after three years. "Because if this round is voted, the next round will immediately withdraw, which will be considered as an ugly way to cash out in the circle." It has developed with education for 9 years.
In addition, Xu Hua also mentioned that if the media rumor that "One Education has raised 2 billion yuan this year and its valuation exceeds 3 billion US dollars" is true, then investors will definitely put forward clear time requirements for its listing, such as listing within three years. "There are not many funds that can be afforded in the future, and we can only go to the secondary market for financing." He said.
However, since listing together is imperative, the choice of listing location is worthy of careful consideration.
Xu Hua analyzed that with the intensification of the Sino-US trade war, Chinese stocks listed in the United States this year have been shorted, especially in the field of education, which has led most investors in the US stock market to be skeptical about Chinese stocks, which will undoubtedly bring many uncertainties to educational enterprises that are about to go public in the United States.
At the same time, combined with the performance and stock price performance of New Oriental Online, a listed company in Hong Kong, although the losses are expanding, the market value has nearly doubled compared with the beginning of this year, which also proves that online education has been recognized and sought after by Hong Kong investors. "In contrast, HKEx naturally becomes the first choice for education listing," Xu Hua said.
The listing of education planning together will undoubtedly bring variables to the industry.
"The successful listing of education together will further intensify the competition in the industry." Zhou Bin explained to Bullet Finance that at present, online education mainly covers first, second and third tier cities, and the market goes further. Although online education has penetrated, it is still dominated by traditional offline education, so the total number of students in online education is relatively limited.
In addition, students only have a few hours of extra-curricular study time every day. In this case, the strong participation of education will inevitably lead to intensified competition.
However, parents of students may benefit from it. Zhou Bin believes that the fiercer the industry competition, the easier it is for institutions to fight price wars, which will force them to constantly optimize and improve their curriculum products to some extent.
Whether a company can successfully go public has also been pulling the capital side.
"It will bring more confidence to the later investment funds." Xu Hua said that the successful listing of education together once again proved that online education in Hong Kong stocks was smooth sailing.
Xu Hua even mentioned that if an education is successfully listed, it will definitely bring some warmth to online education practitioners. "Education together was founded for 9 years before it went public. As long as you insist on not giving up, you still have a chance to realize your dream of going public. "
However, Qin Xin said bluntly that education together may not necessarily succeed.
He told Bullet Finance that in recent years, Yike Education has been adjusting its profit model. It can be said that almost all income-generating methods have been tried, but most of them ended in failure. "In the past few years, it has done one-on-one and small classes in online class business. After seeing the successful verification of the online large class mode in the past two years, I bet on the online large class mode. "
In Qin Xin's view, even if education is successfully listed together, the future stock price performance is still worrying. "Although Hong Kong stocks are not required to be profit-making enterprises, the stock performance in the Hong Kong stock market is more polarized, and the stock price performance of profit-making enterprises will be relatively better." He said.
Judging from the current information, it is not known whether education will be listed successfully next year. But what is certain is that the problems faced by the company need to be solved urgently.
According to Bullet Finance, education together was originally cut into primary and secondary schools from the operation scene. At present, there are two major business segments: on-campus and off-campus. Among them, the school-entering business is mainly undertaken by a primary school, a middle school and other sub-brands, and the off-campus business is mainly undertaken by sub-brands such as learning together, learning online schools together and public welfare together.
In fact, the development of the enrollment business is not smooth.
"As a parent, I actually hate the' Together Elementary School' student version of the APP." Zhu (pseudonym), a parent who is using the products of an educational school, told Bullet Finance.
Zhu bluntly saved the teachers' trouble. They only need to click publish on the APP to complete the arrangement of students' homework, but it increases the burden on parents. "It needs to take photos and upload homework. The older children are all right. Like our children, they are only in the first grade, and they can't independently complete the homework assigned by the teacher through the APP. " He said.
In addition to causing parents' dissatisfaction, education has also encountered the problem of "difficult to realize" the business of entering the park.
Zhou Bin told Bullet Finance that policy supervision is becoming stricter, and all charged products cannot enter schools in principle. Even if we succeed in enrolling, public schools are not as rich as we thought. They are basically public institutions, so the willingness of public schools to pay is not particularly strong.
More importantly, educational information products are generally decided by the education bureau or the higher education department. "They want to purchase, unified procurement, not the client in charge. It's the principal's turn to make a decision, and the principal doesn't have much money in his hand. " He said frankly.
Of course, there are also some free products that enter the school smoothly. But in Zhou Bin's view, free products will eventually solve the problem of profit model.
Education together does get a lot of user data, but I dare not do some over-marketing. For example, by calling parents to promote the long-term recommendation of courses or channel apps. "Because of the push, parents will complain to the Education Commission. As a result, the school is likely to be closed. "
In addition, on the surface, education together can obtain users' data before, during and after class through homework scenes, but it is actually a false proposition.
Zhou Bin revealed that the platform can only collect some data before class, because most teachers are actually very busy, and they usually use an educational product as a tool to assign homework. "Our children's teacher arranged homework, and he arranged it, basically not watching it."
The platform can hardly collect the data of this part of the class. "Because students are forbidden to bring electronic products into the classroom, and many teachers are not used to using electronic products in the classroom." He said.
Zhou Bin admits that most teachers pay little attention to this link after class. Although the products of education together have answering function and can be personalized, many teachers actually have no time to answer students' questions every day. "Moreover, I found that after we filmed the video and uploaded the homework, the teacher didn't actually watch it." He said.
According to public information, educational products cover more than 6.5438+0.5 million schools, and 53 million students and 27.4 million parents are using the company's business. If these user data can be transformed into the online school platform, its value is self-evident.
However, this seemingly reasonable idea does not work in reality.
"It is extremely expensive to educate and maintain the activity of platform users on campus." Qin Xin revealed that since 20 14, One Education has been constantly seeking a balance between user activity and operating costs. The greater the platform investment, the better the user activity, but at the same time, the greater the loss. Conversely, the lower the user activity, the worse the final conversion effect.
"Therefore, the cost of educating the original operating platform users into their online users is not necessarily lower than buying traffic directly from the market." Qin Xin said.
It is worth mentioning that many people will have a cognitive misunderstanding: that as long as the product is good, teachers and students will like to use it, so that the high retention of the platform will be guaranteed. On this basis, supplemented by various value-added services, it is bound to achieve good results.
However, this is not the case. Qin Xin said that education together has never stopped trying to provide value-added services since 20 14.
The problem is that the establishment of value-added services is based on the premise of active users, and the retention cost cannot be too high. If you spend money to maintain user activity and retention rate, it is obviously not long. "As far as I know, education is done together in this way. Let teachers participate by giving them certain benefits. "
Of course, it is not only education that allows school teachers to use products for a long time through extra payment, but also many educational information enterprises.
Qin Xin said frankly that from the product itself, most educational information products are good products, but once put into the whole educational scene, it is not the case.
"Educational information companies are basically wishful thinking." He explained that many school teachers do not think that educational information products can significantly improve their teaching efficiency and students' grades. After all, whether a teacher can manage and teach the students in his class well depends more on human factors than educational information products. Otherwise, the teacher will definitely use it actively.
Qin Xin stressed, "If you simply give it to school teachers, they will find it troublesome and new." If you want them to make good use of it, you must use some other means. "For example, arrange people to go to school to help teachers do this together, and even tell teachers that as long as they use it well, the platform will have some incentives for good teachers." Obviously, this situation is difficult to maintain for a long time.
In other words, whether education together can tell a good story depends on whether it can do a good job in large classes and has the advantage of gaining customers. "That is, users who settle in schools can achieve low-cost conversion." Qin Xin said bluntly.
Qin Xin believes that the threshold for admission is actually not high. "Of course, people who don't understand will find it difficult and don't know how to get in. For those who are familiar with this field, the actual cost is not high. "
Although the entry threshold is not high, the education together is at risk of being replaced at any time. "Replacing your product is not necessarily better than yours. It may be just because of local connections, or it may be because the price is lower than yours. " Xu Huaru said.
"Bullet Finance" learned that there are two main ways to realize the business of enrolling together: one is to divert water to the online school through the APP, and the latter will realize commercial realization.
But the effect of this method is not obvious. Zhou Bin gave an example. It is also the data of 6.5438+million registered users. The number of paying users converted by online head education institutions in the market is 6.5438+million, and the final total conversion of online schools may be 6.5438+million.
He explained that education together is a public school channel, and parents often download and use an APP for primary and secondary school students in order to complete the tasks assigned by the school. In other words, a weak relationship has been established between parents and it. "We didn't choose it on our own initiative, but we were forced to download it."
In contrast, parents choose educational apps on the market, mainly because children can't do homework, take pictures or search questions. "This is different from what others impose on you." Zhou Bin said.
The other is that it provides content services for public schools. "However, this part of the income is relatively small." Zhou Bin said.
Zhou Bin said that at present, most of the educational institutions that initially cut into primary and secondary schools from homework scenes are in a tepid state. "These institutions finally returned to the road of selling classes because they did not find a better profit model."
Since the enrollment business is blocked, what reason is there to insist on keeping the academic qualifications together?
"Before finding a new method, we must keep the original method." Zhou Bin analysis, compared with other online education institutions in the market, this is also a differentiated advantage that education has established for a long time. Campus is a low-cost traffic source, although the effect of eventually transforming into online school users is average, at least there is. "It's especially like chicken ribs. It is a pity to eat tasteless and abandon it. "
In addition to entering the school business, the development of education's off-campus business has also been frustrated.
"The key is how to solve the problem of localized teaching and research." Zhou Bin believes that this is a big problem that all institutions, including Education Together, must face in the online live broadcast of large classes.
He introduced that the textbooks used in primary and secondary schools in different provinces and cities are not the same, and the examination requirements are also quite different. This means that online education institutions need to do teaching research and development according to the actual situation of local teaching materials and examination syllabus. However, online live broadcast in large classes can only teach some general knowledge points, which cannot meet the needs of students all over the country.
In addition, another big problem that institutions that adopt online large class mode, such as Education Together, need to overcome is how to solve the problem of hierarchical teaching. Zhou Bin said that the level of students in a class is usually uneven, which means that their teaching feedback to the same teacher must be different.
"For example, in a class with 100 students, students with good grades think that the teacher can teach all, students with medium grades think that the teacher speaks just well, and students with poor grades think that the money spent is not worth it because they can't keep up." He said.
How to find students with similar learning levels in the same class has become a big challenge for all institutions that focus on online large classes. "Otherwise, the larger the class size, the worse the effect." Zhou Bin said bluntly.
He also mentioned that colleges and universities that mainly promote online large class mode will also face the problem of how to solve regional charges.
"If you receive 3,000 yuan/month in Beijing, parents of students can generally afford it and don't feel expensive; If the same charging standard is put in Hohhot, parents will feel very distressed. After all, the local wage level is too low. " He said.
However, the problem is that the online live broadcast of large classes is usually aimed at students from all over the country, and it is impossible to change the price according to a certain province or city alone. This also explains why it is difficult for online live broadcast of large classes to sink to low-tier cities.
"Online live broadcast of large class education model may not be realized." Qin Xin threw his doubts to bullet finance.
He believes that education together must first have the ability to build famous teachers independently. "You can't just spend money to dig so-called famous teachers in the market." Because the online live broadcast of large classes requires not a few lecturers, but a lot. As an educational information company, it is really doubtful whether education together can build an echelon of famous teachers at a reasonable price.
Colleges and universities should have the ability to retain famous teachers while building. The so-called famous teacher actually needs a supporting teaching resource system. "Whether such a system can be established is a problem in itself," said Qin Xin.
"Everyone thinks that the online large class model is established, and many institutions have followed suit. But so far, there are few truly large-scale institutions, which shows that it is not easy to do it." Qin Xin said.
Whether an education can successfully impact the market depends not only on whether it tells a pleasant traffic story, but also on whether the company can fill the "hole" behind its business development in advance when its capital is cold.
* The picture in this article comes from: Picture Network, based on VRF protocol.