Emerging Trends for Venture Capital Activities in China’s Privatized Education

Apr 20, 2016 Blog 0

By Emerging Strategy

China has slowly started to encourage private investment in its education systems and services. Despite the presence of some larger scale, established educational service providers, on the whole (and especially in emerging sectoral hotspots such as Learning Management Systems) the industry remains somewhat fractured, with numerous competing start-ups and young enterprises battling for market share.

In such a business environment offering enormous upside financial benefits for first movers, 2015 saw a marked increase in venture capital (VC) investments in education service providers and ed-tech companies. While a pickup in capital flows to the industry is a trend that has been noticeable for the past several years, 2015 saw significant investment in Chinese K-12 education and ed-tech related services as watershed trends. The influx of VC funds into these areas, especially in emerging ed-tech niches such as gamification and mobile learning, represent significant opportunities that should be noted for the future.

The Rise of VC Interest in K-12 Learning and Chinese Ed-Tech

According to a study conducted by Emerging Strategy, up until the end of Q3 2015, 115 of 171 publically announced education sector VC deals were conducted in USD. While the dollar has long been the most commonly used currency by investors in the sector, the Chinese Yuan has displayed a continuing steady increase that is not only indicative of China’s economic heft, but of the importance of the country as an emerging investment destination for ed-tech.

Source : China-briefing