Lu Yuqing’s mother never expected that the defeat of the winning education would come so suddenly. On Saturday, October 17th, after lunch, Lu Yuqing’s mother had planned to urge her daughter to take online classes, but found out that the previously reserved course had been cancelled. The teacher who asked Yousheng Education on the phone found out that she was in Beijing Shilibao, Yousheng Education The school district was about to close down, and the teachers went on strike.
However, just a few weeks ago, the teachers of Excellent Education were still chasing after her and encouraging Lu Yuqing’s mother to renew her fees at a low price. She paid a total of 30,000 yuan, 80,000 yuan and 3,000 yuan to Yousheng Education in total. The last one paid more than 3,000 yuan, because she couldn’t stand the daily information harassment of sales. The three payments were equivalent to more than 400 class hours. Now, in Lu Yuqing’s learning account, there are still more than 50,000 yuan in class fees.
Pay it back!
Yousheng Education headquarters and various campuses have become a mess.
Within the company, the staff responsible for recruiting new customers and renewing registration are the group with the most intense emotional reversal. A few days ago, they were still working for the excellent education, trying every way to impress the parents to renew their fees. They even won a discount of more than 50% in class hours. Now they, like the students and parents, have become victims. The company defaulted on wages.
How hard I worked back then, I regret much now. After being unable to receive a salary for several months, teachers from dozens of campuses in Beijing and Tianjin and other campuses invited parents to gather together at the headquarters of Yousheng Education in SOHO, Guanghua Road, Beijing to defend their rights, in order to obtain greater attention from the society and better results. . However, after they waited for a day, they only waited for a negotiator from Excellent Education to tell everyone, “Whoever wants to resume classes, add me to WeChat to join the group.”
Some parents have long been disappointed. Lu Yuqing’s mother told the “Chinese Entrepreneur”: “I actually had no hope for a long time. I came with other parents, hoping to have more strength. In the future, I can only pay more attention, make more money, and provide my children with more freedom. Environment, will choose a more secure brand.”
At the scene, a parent told the “Chinese Entrepreneur” that one parent had two children, both of whom had applied for Excellent Education, and there was still 400,000 yuan in class fees. There are also those parents who paid during the National Day, “The children did not attend a class, so a lot of money was in vain. Many of them did not even sign contracts and receipts.
In fact, parents have a certain foundation of trust in Excellent Education and its founder, Chen Hao.
“Chinese Entrepreneur” got three answers after asking many parents: one is because I often see Chen Hao in the BOSS group of Tianjin TV’s job application program “It’s Not You”, Yousheng Education has a certain brand awareness; the other is winning Education has many campuses in Beijing, and the location is not far from public schools. Parents think it should be more secure and closer; third, the one-to-one service of Excellent Education is cheaper than learning and CEPEY, and parents also have A certain reputation.
The main business of Yousheng Education is personalized education, quality education and family education for K12 people. Among them, 1 to 1 is its main product. The company has more than 30,000 full-time and part-time employees, and has more than 1,500 stores across the country, which are directly operated. , Direct alliance and joining three forms.
On October 21st, Chen Hao finally spoke up. He conveyed some information to the outside world through online live broadcast.
“The rupture of the cash flow of Yousheng Education was due to the rapid development and irregular management in the previous two years. As a result, nearly 50% of the campuses across the country were relocated and renovated. The green rebate channel was opened to maintain the brand. In addition, due to some of its own decision-making mistakes, In the absence of sufficient capital reserves, the impact of the epidemic has led to the current situation.” Chen Hao explained why Yusheng Education encountered the current crisis.
In fact, during the epidemic, Winning Education was exposed to lack of salary and layoffs. On April 13, Chen Hao issued a public apology letter titled “Chen Hao, Founder of Yousheng Education: I sincerely apologize and overcome the difficulties!” It read: “During the reform process, some decisions are made for efficiency. As a result, it lacks meticulousness and thoughtfulness, especially in recent days that individual affiliated campuses have been in arrears with their employees.”
“The painful experience is due to our negligence in the control of individual franchisees. The current situation has changed and we have not reassessed the franchisees with hidden operating risks, which resulted in insufficient funds reserved, which resulted in a large number of refunds. Later, the untimely handling of the phenomenon caused consumers and employees to feel insecure and led to negative emotions.” Chen Hao wrote.
In May of this year, Chen Hao also contacted Jinzhou Cihang, a listed company, which planned to acquire 100% of Beijing Yousheng Tengfei Information Technology Co., Ltd. held by its counterparties such as Chen Hao. Yousheng Education is a wholly-owned subsidiary of which the consideration shall not exceed 500 million yuan.
Jinzhou Cihang is a listed company covering gold jewelry processing, financial leasing and other businesses. According to the financial report, Jinzhou Cihang has been losing money for two consecutive years. The company’s stock price has been below the face value of 1 yuan continuously and is on the verge of delisting.
However, in the eyes of the parents, the reason why Excellent Education has fallen into this position is that Chen Hao misappropriated the tuition fees of the parents of the students, causing the company’s capital chain to break, failing to pay wages, the teachers’ strikes, and the parents of the students returning the fees, which caused dominoes. effect.
In the parent rights protection group, someone sent a screenshot. In the picture, Yousheng Education staff asked salesmen to “not allow all money to enter the Beijing account. Once found, the performance is invalid, the school district responsible person including the school district finances will be fined. All tutoring fees And other income goes into the previously issued Tianjin Youwen management account”. Tianjin Youwen is a new company registered by Chen Hao at the end of 2019.
On October 13, Beijing’s Haidian Market Regulatory issued the “Consumption Warning on Carefully Choosing Education and Training Institutions”. Winning Education ranked first on the list of complaints, with 193 complaints and the lowest resolution rate, only 3.63%. This year Has been on the list three times.
Pre-charging is unique in the education and training industry. However, regarding the pre-charging of students, the government has issued relevant policies as early as 2018. In 2018, the General Office of the State Council issued the “Opinions on Regulating the Development of Off-campus Training Institutions”, requiring that off-campus training institutions “not charge a one-time fee that spans more than 3 months.” The starting point is to avoid training institutions from charging high one-off fees. Risk events such as running off after tuition.
However, the reality is that the sales staff of Yousheng Education will encourage parents to report more and pay more by means of low discounts and other means. The more you pay, the greater the discount. At the same time, for parents, enrolling their children in classes is a fixed family expense. Frequent replacement of training institutions is costly, so they usually choose to study in a fixed institution, but in this process, parents often ignore the risks. cost.
In the live broadcast on the evening of October 21, Chen Hao said, “The problem of Beijing area can be completely solved by obtaining another 50 million yuan of funds. If there is 100 million, the whole country can be completely solved.”
But the wall fell down and everyone pushed. At the time when the news of arrears of wages and fees continued to be heard from Yousheng Education, Jinzhou Cihang announced that it would terminate the acquisition of Yousheng.
In 2020, there are not a few education companies that have fallen. According to industrial and commercial data, as of September 7, the number of cancellations and cancellations in the training industry nationwide was 70,600, which is equivalent to the disappearance of more than 254 training institutions every day.
At the bus stop downstairs at SOHO, Guanghua Road, Yousheng Education Headquarters, parents who have spent the day resting are resting on the large advertising screen next to the bus stop. The large screen is an advertisement for homework to help live lessons.
Photography: Zhao Dongshan
A screen separated, but another world.
Job Gang’s ads are just the tip of the iceberg for online education brand owners to spend money on marketing. After 4.5 billion yuan was put into the war during the summer vacation, the competition for students in the autumn started one after another. According to 36Kr reports, in the competition for enrollment in the fall, the Yuanjiao family alone prepared a budget of 1 billion yuan to participate in the war.
On the second day when Chen Hao appeared on the live broadcast and was struggling to seek 100 million funds, Yuandao Guidance announced that it had received a new round of financing totaling 2.2 billion U.S. dollars, with a post-investment valuation of 15.5 billion U.S. dollars, becoming the largest one in China’s Internet industry this year. Financing. This is also the third financing completed this year by Yuanfudao, and its annual financing has reached 3.2 billion US dollars.
The reason why the financing is divided into two rounds of G1 and G2 is because many investors want to subscribe, and the investors have a bright background. Tencent, Hillhouse Capital, Boyu Capital, IDG Capital and other old shareholders, preemptively subscribed for shares in Yuandao in August, leading the delivery of USD 1.2 billion.
And DST Global, which led the round of G2 investment, and CITIC Industrial Fund, Singapore Government Investment Corporation (GIC), Temasek, Trust Capital, Dehong Capital (DCP), Jinglin Investment, Danhe Capital, etc. The price of the old shareholders entered Yuandao Guidance and completed the settlement of 1 billion US dollars.
In stark contrast to Chen Hao’s difficult situation in seeking funds, Yuandaodao’s troubles are how to get the quotas of the investment giants vying to enter the game. Therefore, each round of Yuandaodao’s financing will exceed the expected amount, or even reverse. Times. DST Global, the leading investor in the G2 round, has invested in companies such as ByteDance, Meituan, and Didi. Its investment style is known for its “first place only” investment style.
The competition for capital continues.
According to “LatePost”, another online education company Job Gang is also about to complete a new round of US$700-800 million in financing, with a post-investment valuation of more than US$11 billion. Investors include Fangyuan Capital, SoftBank, Sequoia Capital China and Tiger Global Management Company, etc. Job Gang also received a financing of US$750 million in June this year.
The direction of capital surge is the direction of industrial transformation. “Everyone wants to invest in the unicorn in the industry and the next one to learn and think. This is everyone’s mentality and consensus.” An online education industry investor told “Chinese Entrepreneur”.
At the same time, the tentacles of online education to gain customers are still dropping. Competition in the K12 field has become too fierce, and more entrepreneurs and investors have shifted their perspectives to the children’s enlightenment battlefield before K12.
In the field of children’s English, Banyu received 120 million U.S. dollars in Series C investment and tens of millions of U.S. dollars in a new round of investment in August and September. The speed of financing cannot be underestimated, and the investors include GGV Jiyuan Capital, BAI (贝Tasman Asia Investment Fund), Hainer Asia Venture Capital Fund (SIG), Hewlett Capital and other institutions.
Cong Jia, vice president of BAI, who made additional investment in Banyu’s second round of financing, is very optimistic about the field of children’s quality education and believes that it is an entry-type track.
“Banyu established its own traffic pool through digital content such as picture books in the early stages of this track, which greatly reduced the cost of acquiring customers that was driven up by giants burning money.” Cong Jia said, “At the same time, Banyu also provides AI classes, Multi-form products such as 1-to-1 live lessons can meet the needs of different users.”
In addition, there is another point that investors also value. The founder of Banyu, Huang He, comes from the early team of Toutiao and has his own long-term accumulation in technology.
On the day of the announcement of the financing, Huang He once said that while the company is deeply plowing children’s English, it will also begin to expand multi-disciplinary such as mathematics and language. At the same time, the fast-growing business also requires a large number of excellent talents. From the end of last year to the present, the Banyu team has expanded to nearly 2,000 people.
Funds and talents are gathering at the head of the industry.
According to the “Education Industry Financing M&A Report in the First Half of 2020” issued by the education investment bank Taoli Capital, the amount of financing in the education industry dropped sharply in the first half of 2020. A total of 112 investment events occurred, which was a 32% decrease from the previous month and 45% year-on-year. The amount actually climbed, reaching RMB 19.6 billion, an increase of 10% from the previous month and 15% year-on-year. The average single financing amount increased by 77% year-on-year. In addition to the recent new round of $2.2 billion in new financing from Yuandao Guidance, the entire industry’s financing amount this year has approached 35 billion yuan.
In addition, the Matthew effect of online education is becoming more and more obvious, and large investment institutions have shown extreme enthusiasm for leading online education companies such as Yuandao. For example, in the total financing of 19.6 billion in the first half of this year, Ape Guidance and Jiajiabang alone accounted for about 80% of the total financing, and the financing of other companies accounted for a small proportion. In the second half of the year, Yuanjiao’s $2.2 billion financing will still be the highlight.
Against the background of relatively flat investment and financing this year, online education has become a rare high-quality track. Behind the large sum of money burning and financing, some people also questioned whether online education will burn the next ofo like shared bicycles?
However, people on the battlefield have no time to take care of the controversies from the outside world. They are more concerned about whether every dollar spent is on the blade.
Different from the blindness and radicalization of shared bicycles, Internet education entrepreneurs have waited too long for the opportunity in the past 8 years. Because of the heavy service model, online education has been slow in the process of Internet transformation in various industries. . This year’s new crown pneumonia epidemic has become a rare window period in the industry. Everyone knows that, unlike offline, online means an infinitely magnified scale effect and increased brand concentration.
“Even the combined market share of New Oriental and Good Future is less than 10% of the total education and training market in China.” New Oriental founder Yu Minhong once described the decentralization of offline training. But after the epidemic, online education has gained a rare window period, and giants have also swarmed.
ByteDance began to lay out education in 2018, and successively launched educational services such as GoGokid, aiKID, Qingbei Online School, and Study Hard. Among the 105 investment cases of ByteDance, 12 are related to education. On October 29th, Bytedance released its first independent education brand, Vigorous Education, and will undertake all educational products and businesses of Bytedance in the future.
An online industry transformation and reshuffle is accelerating, and with the addition of giants, accidents like the excellent education and stories like Yuanjiao will continue…
(Note: At the request of the interviewee, Lu Yuqing is a pseudonym in the article)
By Zhao Dongshan, reporter of “Chinese Entrepreneur”
Head Picture Photography | Zhao Dongshan