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GSX, the world's first education technology company with a market value of 10 billion US dollars was born _ China

Release Time:2021-07-18 Topic:No. 1 company in the world by market capitalization Reading:11 Navigation:Stock Liao information > Education > GSX, the world's first education technology company with a market value of 10 billion US dollars was born _ China phone-reading

So how will an online education company that has only been established for 5 years surpass the industry giants? Where is the confidence? What is the underlying reason?

In fact, the author noticed early on this company, and also conducted in-depth understanding and analysis. I also wrote related articles before, but the market value of this company is less than a few. The market value rose from $7 billion to $10 billion in ten days, which really exceeded everyone's imagination.

1. Why is the prospect of K12 online education promising?

In the past two years, due to a series of reasons such as economic downturn, capital cold, and policy tightening, China’s education and training industry has entered a “shuffle period” and the industry has accelerated its integration. From last year’s 20-year-old English training organization Weber English to this year’s New Third Board, Brothers Education and other institutions announced that the funding chain was broken, casting a shadow over the entire education industry.

Affected by the epidemic, offline institutions have transformed to seek online development. The domestic online education industry has become a blowout. The Internet The economic advantage of not being restricted by space has been demonstrated, and mobile games, e-commerce, and online education have ushered in rapid development.

Some people in the industry believe that this incident has at least saved hundreds of billions in traffic fees for online education companies. Discussions about online education also detonated the Internet casually, becoming one of the most popular topics in the education world.

Rather than saying that the public is concerned about online education, it is better to say that education, as a people's livelihood project, has always attracted attention.

Not only in China, but even on a global scale, education and economic, environmental and other global issues have the same prominent status, and this epidemic is undoubtedly a fuse, which can be quickly covered by thunder. The trend ignited online education. Investigating its internal reasons, the author summarized the following reasons:

Educational concept: Chinese families attach importance to education

Over the past 40 years of reform and opening up, China's economic level has been significantly improved, and the consumption ability of Chinese families has been upgraded, and the emphasis on children's education has also risen to a new level.

According to the South China Morning Post, “

Chinese families with preschool children spend an average of 26% of their income on children’s education, while the education-related expenses of families with primary and secondary school children Accounted for 20% of its revenue."

The "

Crazy Haidian Yellow "Zhuang" also reflects the educational anxiety of Chinese parents.

▷ Population size: The population foundation has laid a huge market size

According to the latest data from the National Bureau of Statistics,

China’s population exceeds 1.4 billion for the first time , Accounting for about 20% of the world’s total population. At the same time, the 35-year one-child policy has ended, which will also lead to an increase in the number of students in the next few years.

Public data from the Ministry of Education also shows that

there are about 100 million elementary school students, about 43 million junior high school students, and about 23 million high school students in primary and secondary schools across the country. This is about 160 million enrollment. The population constitutes a large-scale potential user of the K12 education industry.

The user life cycle of more than ten years from kindergarten to high school graduation means high renewal rate, and high renewal rate can effectively reduce customer acquisition costs and win long-term and stable profit space for the organization.

As of June 2019,

the number of online education users in my country has reached 232 million. It is estimated that by 2020, the number of online education users in China will exceed 300 million. By 2022, China’s online education market The scale will exceed

5400100 million yuan, it is possible to break through the trillion yuan mark in the next 10 years!

How will the current education model adapt to the scale, quality and speed required in the future? Judging from the current development situation, it is clearly far from enough.

▷ Economic differences: Regional economic differences are obvious, and uneven distribution of educational resources brings market demand.

As we all know, China is not only a populous country, but also a vast territory. Due to the differences in regional economy, there are obvious differences in the distribution of educational resources. The education level in the central and western regions is obviously lagging behind the eastern coastal regions.

In December 2019, the Organization for Economic Cooperation and Development OECD released the latest "

International Student Assessment Project" (Program for International Student Assessment, PISA) PISA2018 test results show that, on behalf of The four provinces and cities of China, Beijing, Shanghai, Jiangsu, and Zhejiang, form part of the regional consortium, topping the list with 555 points in reading, 591 points in mathematics, and 590 points in science.

However, Angel Gurria, Secretary-General of the OECD, emphasized that these four provinces and cities in eastern China "

are far from being representative of China’s overall situation" because these four This region is the region with the most developed economy in the country, and it is also the region with the richest educational resources.

Another data of PISA2018 illustrates the impact of economic problems from the side. The data shows that

on average 10% of the children of wealthy families have higher reading scores than the students with the worst family conditions. A full 141 points!

New Oriental, Good Future, and "

The First Unit of Online Education" GSX, etc. are fighting in the first-tier cities, but are also actively sinking into the third- and fourth-tier cities .

Demand creates a market. When the first and second-tier cities are already in the Red Sea and have become saturated, the sinking cities, which account for 70% of the students, have become important targets for the major giants to open up the battlefield.


No matter how hard it is, no matter how poor it is, no matter how poor it is to have education", it reflects the desperate desire of thousands of ordinary families to hope that their children can change their destiny through education for decades. The economic strength of third- and fourth-tier cities is not as good as that of first-tier cities, but the potential is huge.

▷ Policies and regulations: both supervision and encouragement

In June 2011, the Ministry of Education issued the "

Ten-Year Development Plan for Education Informatization ( 2011-2020)" (draft for comments) clearly stated that "

All levels of government shall allocate no less than 8% of education funds to education informatization funds". Since 2011, the Chinese government has increased the proportion of its GDP expenditure on education almost every year.

In February 2019, the State Council issued "

China Education Modernization 2035". In the deployment of education modernization,

Internet-based informatization education and building services for all people The lifelong learning system is included in the top ten strategic tasks.

At the end of September 2019, the Ministry of Education and other eleven departments jointly issued the "

Guiding Opinions on Promoting the Healthy Development of Online Education", which

emphasized the need to build support for the development of online education The policy system clearly proposes to encourage social forces to set up online educational institutions and support the in-depth cooperation between Internet companies and online educational institutions. Online education has also become another field that national policies encourage private capital to enter after vocational education.

▷ Educational trends: autonomous learning, educational innovation, and technological revolution will all promote the digitalization of education

Facing the huge global and domestic education market, The demand for education from the government, schools, and individuals will reach unprecedented heights. This will inevitably lead to a situation of insufficient education resources. Then, in the face of the shortage of education market and the serious shortage of teachers, how should we deal with it? Many education experts believe that online education may be a good medicine.

However, judging from the current form, the digitalization of global education is relatively backward, or that investment is not enough.

Statistics show that in 2018, global education spending on digitalization was only 142 billion U.S. dollars, and digital spending accounted for less than 3% of total expenditures. Although it is expected to be 202It will grow to US$3420 in 5 years, but it is still less than 5% of total expenditures.

Therefore, education cannot really exert its strength and solve the problem of lack of education on a global scale, just like the past year, Xueersi Online School, Ape Guidance, Homework Gang, and GSX in the United States, etc. Adding up to a dozen heads makes it less than 5% of the market size. The market potential of online education is unlimited.

The rise of autonomous learning, educational innovation, technological revolution and educational revolution will all promote the digitalization of education. Online education will receive more and more attention, and the market prospects can be imagined.

2. The size of the market determines investment decisions

According to Deloitte and related institutions,

By 2025, the size of China’s education market will Reached 715 billion U.S. dollars (equivalent to 50 billion RMB), of which the online education market will have a scale of 300-400 billion yuan in 2020. In the next 10 years, China’s K12 online education market will increase by 23 times And it has a market size of more than 1 trillion yuan.

The huge market size has attracted the attention of investors at home and abroad. According to Forbes reports, in 2018, China established 97 new "

Unicorns" companies. This means that

an average of 3.8 new stars are born every day, and even the valuation of a startup company may exceed $1 billion.

According to Holon IQ data, in 2010, global online education started the next golden 10 with a venture capital investment of 500 million US dollars. year.

In 2019,

the amount of global education technology financing exceeded US$7 billion, which is 14 times the total amount of financing in 2010!

It is estimated that the amount of investment in online education in the next 10 years will exceed US$87 billion, almost three times that of the previous 10 years. China accounts for half of the total online education venture capital. China is the world's largest education market and has been leading the growth of education venture capital in the past five years.

In the past ten years, China accounted for 50% of the total global education venture capital investment, the United States accounted for 33%, followed by Europe, India and the rest of the world. Each investment accounted for about 5 of the total global capital. %.

According to data from the American media EdSurge, in 2019, US investment in education technology companies reached at least 1.66 billion U.S. dollars (approximately 14.4 billion yuan), involving 105 transactions, the highest peak in 5 years.

Looking back at China, relevant data show that in 2019, there were 148 financing events for online education in China, with a total financing amount of approximately US$1.7 billion (approximately 11.56 billion yuan). The numbers and quotas are surprisingly similar.

Venture capital investment finally left many companies behind in the form of public listing. In 2015, there were 10 listed education companies in the world with a market value of more than 1 billion U.S. dollars, and it is estimated that by 2025, there will be more than 100 in the world.

As of February 20, 2020, there are 5 listed education companies in China with a market value of more than US$1 billion. They are

Good Future, New Oriental, GSX, NetEase Youdao, and New Oriental Online .

Third, European and American vocational education broke out, China’s K12 education is sweet and pastry

According to relevant data from the US Department of Labor, after seasonal adjustment, September 2019 In September, the US unemployment rate was 3.5%, with 5.769 million unemployed people, 15.826 million employed people, resident registered population of 259.638 million, and the labor participation rate was 61%.

When the unemployment rate is at a low level of 3.6%, which is rare since 1969, it may be because people have given up looking for work, resulting in a low labor force participation rate, and it is difficult for employers to recruit suitable talents.

So employers seek third-party agencies to help them recruit top talents or train talents among existing employees. The stimulus of uncontrollable economic factors has spawned a talent recruitment market where employers seek help from outside.

The situation in Germany is even worse. Due to the aging population, there is a serious shortage of labor. According to a report by the Cologne Institute for Economic Research, the job gap in the field of scientific research in Germany has hit a record high.

According to the data, as of 2At the end of October 018, there were 496,000 jobs in the

MINT (technological field) field, an increase of 5.9% over the same period in 2017; the job gap was 338,000, exceeding 68% of the total number of jobs.

This also means that the labor gap in the field of technology in Germany is nearly 2/3!

Note: Due to language relations, "German STEM" is usually abbreviated as

MINT, respectively It is Mathematik mathematics, Informatik computer science, Naturwissenschaft natural science and Technik technology, which corresponds to and is in the same line as STEM in Science, Technology, Engineering, and Mathematics.

German Minister of Education and Research Anja Karliczek delivered a speech on International Women’s Day last year, announcing the promotion of STEM education across the country for the first time, and calling on German women to participate in STEM education and to engage in scientific research. For this reason, it seems that Germany is not an ordinary lack of people.

Ms. Anja Karliczek, Minister of Education and Research, Germany | Picture from the Internet

According to EdSurge research, there are Four educational technology companies have raised more than US$100 million (compared to only two rounds in 2018, three rounds in 2017, and one round in 2016). These four companies are all companies that provide labor training and development services (Guild Education, BetterUp, Coursera and Andela).

According to incomplete statistics, in the past two years, China's online education companies have raised more than US$100 million in the latest round of 6 companies, namely VIPKID, Yuandaodao, 1 to 1, DaDa DaDa English, Small Box Technology, Ai Learning Group (formerly Gaosi Education), Spark Thinking and others are mostly concentrated in the K12 field.

Comparing the similarities and differences of online education in China and the United States, it is not difficult to find that developed countries in Europe and the United States are more enthusiastic about vocational education than K12 education , While the domestic education department pays more attention to primary and secondary education. Of course, last year, it gave great encouragement and support to vocational education (supplementary policies and regulations).

The difference in the emphasis of online education in various countries in the world is based on the basic national conditions of the economy and education of the country.

The vigorous development of vocational education in the United States and Germany mentioned above is due to the surge in demand for labor , while in China,

based on "knowledge changes destiny", the need for college entrance examinations and good college entrance examinations is put in the first place.

To sum up, in the next 10 years, online education in China will continue to grow at a high speed. K12 education (12 years of primary and middle school education), vocational education, and the rising STEM education will usher in 10 years. In the golden period of the year, K12 online education dominates with its "super rigid demand" characteristics.

Among the Chinese concept stocks currently listed in the United States in mainland China, GSX has entered the top 20. In the field of education, GSX closely follows the future. After New Oriental, it is different from New Oriental. , Good Future’s online and offline businesses go hand in hand, GSX focuses on K12 online education. This is the biggest difference between the latter and the former two.

Undoubtedly, GSX is currently the largest online education company by market capitalization in China and even in the world. Previously, India’s K12 online education company Byju’s dominated this position with a valuation of 8 billion U.S. dollars.

The establishment of New Oriental, Good Future, and GSX are almost 10 years apart. At present, the market value of Good Future has surpassed New Oriental, which is about 10 billion US dollars more than New Oriental, and GSX is the youngest A company, only 8 months after listing, is already 1/3 of that of New Oriental, and 1/4 of the future. It is developing extremely rapidly. Perhaps it is only a matter of time before it can catch up with the two giants.

Introduction to K12 online education company "


GSX was established in 2014, led by former New Oriental CEO Chen Xiangdong, from Alibaba, Tencent, Baidu, Sohu, New Oriental and other industry elites have formed a diversified and efficient organizational structure across many fields such as the Internet, education, and e-commerce, integrating technology and education well.

The screenshots are from the official website of GSX.

In March 2015, GSX announced the A round of financing of 50 million US dollars, refreshing Chinese entrepreneurship The company's Series A financing record.

In November 2015, Yingxue won the "Forbes 2015 Fastest Growing Technology Company in China" issued by Forbes.

In June 2019, GSX successfully landed on the New York Stock Exchange and was the first domestic K12 online education company to be listed in the United States.

On February 20, 2020, GSX has a market value of more than 9 billion U.S. dollars, becoming the world's largest online education listed company by market value.

As a technology-driven education technology company, GSX is adhering to the mission of "Technology makes education better", with a "live + tutoring" dual normal and large class mode, providing coverage for elementary, junior and high schools Users can enjoy high-quality educational resources anytime, anywhere with the full subject courses, as well as language training, vocational qualifications and life interest courses.

GSX adopts the "live + tutoring" dual-teacher large-scale class model, providing full subject courses covering elementary, middle and high schools, as well as language training, vocational qualifications and life interest courses. Students You can enjoy high-quality educational resources anytime, anywhere.

At present, GSX has GSX, Gaotu Classroom, Chengqi Business School, Jinli Academy, Weishi and other brands.

The above GSX-related information is comprehensively compiled from the WeChat public account "GSX Recruitment ".

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