How will the ongoing teaching and training industry governance affect the K 12 teaching and training war?
What are the potential challenges for educational enterprises to go public in China? What are the educational revelations?
What investment space is there in the education industry that seems to be affected by the epidemic? Is offline out of fashion?
The investment in 2020 is one third less than that in 20 19. Is there less money? Or are investors more cautious?
On which education track will the next billion or hundreds of billions of dollars education company appear? What kind of company is it?
On the afternoon of March 3 1, the EICD China Private Education Conference and Capital Special Session hosted by Dolphin Capital, under the auspices of Zhou Shuang, partner of Blue Elephant Capital, Wen Huisheng, partner of Gene Capital Management, Liu Tianhang, executive vice president of 2 1 Century Education Group, Ge Jinxi, partner of Shang Xian Venture Capital, and Chen Liang, general manager of the strategic investment department of Xueda Education Group, conducted in-depth discussions on the above issues.
Blue Elephant Capital is an early educational technology investment institution, which increases the diversity of China's education market by investing in and incubating emerging educational technology products and entrepreneurial projects.
Gene capital is a rare educational investment fund in the market that completely covers the early, growing and mature stages of education. From 20 15 to now, it has invested about 1500 million. Typical projects such as Eagle Education passed the GEM audit of Shenzhen Stock Exchange this year.
Xueda Education has been deeply involved in the education industry for more than 20 years. Its strategic investment department is biased towards industrial investment, focusing on three major directions of informationization, technicalization and platformization, and operates three funds.
In the past year, the K 12 giants have successively obtained an amazing amount of financing. How to treat the entry of capital? What impact will it have on the industry?
Wen Huisheng: The most typical of K 12 giants is the double-qualified university class. The double-qualified university class model has a huge space in the third, fourth and fifth tier cities. From the perspective of supply, the supply of high-quality ground in the sinking market is far less than that in first-and second-tier cities, and there is a lot of room for growth. This financing model is hard to stop. The cost of obtaining customers in the whole industry is very high. Today, no economic model is healthy, and it is difficult to judge who is the ultimate winner.
If you have to say it, you have a good chance of winning in the future. After all, there are billions of profit support lines offline. Pure online company certainly has its space and necessity, but there is great uncertainty about how many people it can suit today.
In the long run, users in the sinking market can choose from online small classes and OMO forms in addition to double normal classes. Parents are definitely willing to pursue results in the end, and don't care much about form; Finally, each business form has its own user base.
Chen Liang: Last year, the direction of taking funds online and offline was different. Online institutions get funds from the primary market, and offline head institutions are more concentrated in the secondary market. All have the value of internet plus, and investment institutions are willing to pay the bill.
Online institutions have abundant capital reserves, and the product design, the feeling of courseware animation and the technical blessing behind it are very attractive. In contrast, offline institutions lack the transparency of service delivery and cannot perceive the actual effect brought by the course to students. Online can be transparent and digital, which is their advantage.
The continuous influx of funds and the blessing of people's heads have caused the Matthew effect of the industry, and the opening on the 28th also reflected the overall maturity of the industry. Conversely, this phenomenon will also have some negative effects on the industry. The education industry is biased towards application, and the technical threshold is not high, which also reduces the opportunities for small and medium-sized institutions to obtain investment and affects the driving force of the industry.
Zhou Shuang: Blue Elephant was founded on 20 15. Up to now, it has invested in more than 90 early education technology enterprises. At 20 15, I dare not vote for K 12, and I can't beat these giants even if I go in. In 2020, we have a very strong feeling that the giants have now fallen into a stalemate, products are homogenized, and traffic delivery has increased.
Because the mainstream products now look so similar, we believe that completely different new ways of playing will give us opportunities. 20 18 and 20 19 invested in some educational hardware, OMO and IP-based educational content. I don't know whether it will grow into the theme of the capital market in the future. But as early investors, we think there should be new seedlings on the market.
The K 12 category has been beaten out of the water, but there are opportunities for new species to come out in other places. Small and medium-sized educational enterprises really can't afford the traffic route, but innovative gameplay also forces small and medium-sized enterprises to use different gameplay to get customers.
How will the ongoing governance of the teaching and training industry affect the K 12 teaching and training war? What is the impact on the industry?
Wen Huisheng: At present, we can still see that a large number of small and medium-sized institutions are not compliant and adopt irresponsible teaching and marketing behaviors, which will have some negative reputation for the education industry. Supervision has further evolved the business behavior of the whole industry, which is beneficial to the development of the industry in the long run.
Before 20 18, the entry threshold of K 12 teaching and training was extremely low. Teachers don't need a teacher qualification certificate or a school license, they can just rent a private house. There are indeed many security risks.
At present, the details of the policy are not clear. It is mentioned in the "double reduction" that online and offline institutions are not allowed to advertise in various media. Nowadays, most people rely on advertisements. If it is true, traditional brand advertisements and effect advertisements can't be cast, which will have a serious impact on online institutions. However, this situation is more extreme. After all, there are many students in the organization, and the social influence is relatively great.
Teacher Zhou also mentioned just now that there is no shortage of products on the market at present, and everyone is using resources inside and outside the school. What is lacking now is high-quality products for schools. As far as national development is concerned, the national policy must be rejuvenating the country through science and technology, and we should look for good investment signs from the lower level of informationization, platform and technology.
Recently, domestic companies with pure training business went public. What impact will the listing of educational enterprises have on the development of enterprises? What are the potential challenges?
It turns out that we have always questioned that online education has developed so fast in recent years that it does not make money. Why can it still exist? In fact, it gives us a signal to do education, which in itself is the state of origin. A healthy business model is reasonable, compliant and legal. This benefits from several points: First, with the support of national policies, the registration system has been opened. If it is not open, these projects will be difficult to go public; Second, the sooner the organization becomes compliant and does not blindly expand, the more favorable it is for the organization to capitalize by establishing its own business model.
Listing can be recognized by capital in the first time and get money as soon as possible. There will be more M&A opportunities to accelerate the development of the industry. More importantly, let the industry realize that it has to pay for compliance and healthy development as soon as possible.
Liu Tianhang: It is of great significance for educational enterprises to capitalize A shares through IPO, which can be understood as breaking the ice. Previously, educational enterprises were basically listed in US stocks and Hong Kong stocks. According to the supervision of the early education policy at that time, before the classification policy of 20 16, educational enterprises basically implemented private non-enterprise legal persons, which restricted the initial public offering of educational enterprises and the issuance of shares to purchase assets. Therefore, most of the later A-share listed companies are listed by backdoor or backdoor. At present, these companies are mainly offline training institutions after the IPO meeting. Compared with universities and high schools with academic qualifications, the requirements of training enterprises in listing policy supervision are relatively more relaxed. With the gradual clarification of policies, more excellent educational enterprises will return to A shares or be listed on A shares.
Wen Huisheng: Now there are many offline training institutions that meet the financial level of domestic listing standards. Now that the policy dividend is open, listing is a matter of course. But for many people, after the opening of the registration system, there is no bonus for the listing of shell resources, so for the founders, think about it, do you really want to go public? If there is no premium and growth after listing, the compliance cost of listing is high and the market value cannot be maintained. Listing is not necessarily a particularly good choice.
For ambitious founders, listing is indeed a good window period, which can multiply talent resources and brands.
Compared with 20 19, the investment in 2020 will be reduced by one third. How to treat the decline in investment?
Zhou Shuang: As an early investor, I think Blue Elephant Investment should be the first round of the industry. Obviously, I feel that the first round of tickets will become very expensive. It is true that there are fewer good seeds, which have become more expensive, so the investment has dropped.
Wen Huisheng: Our investment in 2020 is similar to that in 20 19. On average, 5-6 growth projects will be invested every year, not counting the early stage, and there is not much money. From our own point of view, 70% of our money will be invested in offline projects, and it may take two or three years to communicate with the founders, establish contact with them and communicate the value we can bring to them.
This year, our investment in early online technology has dropped significantly. At this node, there are not many traffic dividends, limited category innovation, and few subversive changes and unconventional new technology delivery methods. But I will continue to be optimistic about AI's imagination in the next 10 and 20 years, and there will be companies with excellent content and technical direction running out.
Liu Tianhang: The investment in 2020 will be affected by the epidemic and policies. The epidemic has accelerated the reshuffle of the industry. The most direct thing is that in 2020, there will be almost no financing for preschool education, study abroad and international schools, and online and vocational education financing will be relatively active. Offline training institutions are also greatly affected by the epidemic, and the uncertainty of operation has intensified investors' caution and wait-and-see.
In the field of universities where 2 1 century education is located, the investment in 2020 is also small. But it is not affected by policies and epidemics. After all, colleges and universities are just needed, and the tuition fees of students remain unchanged every year, and the epidemic is suspended. The fundamental reason is that listed companies tend to be in the mature stage of bidding, and investment in colleges and universities from 20 16 to 20 19 is particularly active. High-quality purchasable targets are relatively few and expensive, so the pace of investment has slowed down.
Ge Jinxi: Although the recruitment of our human resources industry has been affected, the epidemic has accelerated the rapid development of the flexible employment industry. In the past 12 months, there have been seven financing incidents about flexible employment.
We are still optimistic about technological innovation in the fields of human resources and enterprise services. There will be many opportunities in the future, and many tens of billions and hundreds of billions of industry unicorns will be born in China.
Chen Liang: Our investment in 2020 is similar to that in 20 19. Coincidentally, many projects stopped before the outbreak. However, in the next year, we did relatively little. The investment industry relies on imagination and development. Last year, many projects may face survival crisis. Without knowing the spread of the epidemic, we first consider the safety of funds to plan the use of funds.
Last year, the amount of funds did not shrink, but there were fewer investment cases. On the other hand, the reason is that enterprises with financing needs have greater capital needs and higher costs. In this case, similar projects failed in our own investment model and deviated from our calculation. At this time, we can only wait and see.
In which education track will the next educational company with a level of 10 billion or 100 billion dollars appear? What kind of company is it?
Wen Huisheng: First, the K 12 track faces the sinking market of the third, fourth and fifth tier cities, and the ground model has great opportunities. The market scale is large enough to solve the organizational efficiency and product delivery, and meet the needs of users with innovative models. Second, vocational training, besides public education, may also be born in other fields. The third one is related to AI. In the future, AI can replace teachers in certain scenes, disciplines and knowledge categories. If there is a teacher to replace it, it must be a market of tens of billions.
Liu Tianhang: I am optimistic about the development of vocational education in the next few years, vocational education with academic qualifications, vocational training and the integration of production and education.
So this company and a human resources company set up a production-education integration base. The human resources company conducts daily operations and enrolls students, and Party A provides training content. Human resources companies can charge both training fees and service fees, and Party A can have a stable talent supply of 654.38+ 10,000-200,000 people.
From the mode of school-enterprise cooperation and vocational co-construction, the opportunities in human resources and vocational training industry will be very great, and there will be hundreds of billions of imagination in this field in the future.
Chen Liang: We think that hundreds of billions of companies should have these standard points: First, at least the track with high ceiling has enough space; Secondly, there are reference models in the industry, so the market will have higher recognition of valuation; Finally, the imagination space and replicable mode are recognized.
Zhou Shuang: I prefer the open learning platform of paid knowledge. Open learning platform can be simply understood as an education provider who can participate at any time, loves to learn but does not learn, and freely learns all kinds of knowledge and skills. Such a platform is more in line with the characteristics of lifelong learning of young people after 1995. We see that young people in first-tier cities are materialistic, don't buy a house, don't get married, but are willing to do research every day and keep learning, and gradually form the habit of paying for learning.