Livestreaming courses will continue to be a major focus, says company's CEO

The rapid capital influx into China's online education sector will be good for the industry in the long run, but meanwhile, will raise the bar for startups, an industry insider said.

Hou Jianbin, founder and CEO of Zuoyebang, a leading online education startup, said a large amount of capital in the online education sector is "beneficial" as it will accelerate the growth of the whole industry.

"The capital will bring upgrades and accelerate the development of the education segment indeed, but the sector is supposed be boosted at an even pace, with patience and enough time," Hou said. "Also, the cost of gaining users and the threshold of the emerging sector will be raised."

Though it's getting more difficult to "bite a piece of the pie" from the country's online education segment, Hou told China Daily that the company has been gaining momentum as its total revenue growth is 4.5 times bigger now than that of last year.

Hou made the remarks in an interview during the World Economic Forum's Annual Meeting of the New Champions 2019, also known as the Summer Davos, in Dalian, Liaoning province, earlier this month.

For now, Hou denied plans to go public.

"We are not in a hurry to go public. Before that, we hope to achieve a better business performance and build a more solid foundation," the CEO said.

"But once the company goes public in the future, it will definitely be eye-catching ... in its scale, valuation or performance," he added.

Founded in 2015, Zuoyebang raised $350 million in its latest series D financing last year, with top investors such as Goldman Sachs, Sequoia Capital China and GGV Capital.

A report by market consultancy ASKCI Consulting Co said there were 369 moves to raise funds in the education sector last year, the highest record in the past 10 years, and more than half were conducted by online education companies.

Speaking of the booming online education sector, Hou said livestreaming courses in the kindergarten to 12th grade will continue to be a major focus and "will be the biggest contributor of monetizing" by outfits in the sector.

"Livestreaming courses have abundant forms and each specific subject can be divided into different courses which will generate big amounts of revenue," he said.

As an after-school mentoring platform, Zuoyebang started its business by enabling students to take pictures of their questions and search for answers. Later, it developed its major business into livestreaming courses.

The Beijing-based company has 400 million registered users and 80 million monthly active users, its data showed.

"We are optimistic about the prospect of Chinese online education and we think that the country is expected to generate a group of education companies valued at several billion dollars," Steven Ji, co-founder of Sequoia Capital, said.

"It's not an easy task to grab users from the huge cake," Ji said, adding that Zuoyebang is strong at gaining users and that's why they have invested in the company.