2019 Education Industry Financing Trend Report, Where Did the Money in the Venture Capital Circle Go?


Editor’s note: This article is from WeChat public account “Blackboard Insights” (ID: heibandongcha), author Yuanquan, 36 氪 Published with permission.The introduction has ended in 2019, and a total of 332 investment and financing incidents occurred in the education industry throughout the year, a decrease of 297 from 2018.There has been a huge decline in the total number of financing events.In the case of the early decline of enterprises or investments, the investment and financing events in the middle and late stages remained stable.K12 saw its ranking decline for the first time after winning the top spot in the number of sub-track investment events for many years, and replaced it by STEAM.What year has the education industry experienced in 2019?01. The number of annual financing events has been halved. After the education industry has experienced a 16-year investment and financing peak, the number of industry financing events has clearly shown a downward trend as of 2019.Even only 332 financing events occurred in 2019, compared with the same period last year, the drop has approached the 50% mark and reached 47%.The decrease in financing events has occurred for three consecutive years, compared with the previous year, a decrease of 21% in 18 years and a decrease of 10% in 17 years.The tide of investment has gradually receded, the capital market has returned to rationality, and the industry track has also ushered in the cold winter.How to break through the frozen ground under the deadlock has become the biggest issue in the education industry.In contrast, in the first year of online education in 2013, the influx of the capital market, the growth rate of the number of investment and financing events in the education industry from 2014 to 2015 was almost crazy, which is in stark contrast to the current state of the industry.On the one hand, it is the weakness and rationality of the capital market, on the other hand, it is also the result of the sharp increase in the competitive pressure of the market-leading companies.02. Education financing in Beijing, Shanghai, and Guangzhou is still relatively active, and the market potential is still sinking. From the data, we can see that mainstream education financing is still concentrated in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen. The education financing of Beijing alone accounts for 42%.But at the same time, the industry also realizes that under the premise of providing quality assurance, the key to defining the size of the business is the size of the user.The market has become a point of contention for education companies.As the first-tier cities such as Beijing, Shanghai, Guangzhou, Shenzhen and other cities gradually become saturated, the cost of customer acquisition has risen sharply. Compared with first-tier cities, non-first-tier cities are more cost-effective and the market is huge. More than 70% of the country ’s population is sinking.In the market.And with the rapid rise of the economy in non-first-tier cities, parents have gradually paid more attention to their children’s learning, and their education expenditure has gradually increased in the family consumption structure. Parents’ demand for education has begun to surpass that of first-tier cities.Further improvement.Coupled with the maturity of online live streaming technology and the further popularization of dual teacher classrooms, the sinking of teachers in first and second tier cities has further promoted the development of education in third tier cities, and more and more education companies have migrated their business to non-first tier cities.03. Affected by the cold winter of capital, it is becoming more difficult for early education companies to raise funds. According to the statistics of blackboard insights, a total of 332 funds were raised in 2019.Financing events were mainly concentrated in the tens of millions, with a total of 139 cases, accounting for 42%, a decrease of 65 during the same period, an increase of 10% over the previous year.It is worth noting that there were a total of 43 investment and financing incidents of 100 million yuan in 2019, accounting for 13%, and only 9 cases decreased in the same period, an increase of 5% over the previous year.From the data we can see that although the number of investment and financing events in the overall education industry has decreased sharply, and investment and financing of different magnitudes have declined to a certain extent, the investment and financing events at the level of ten million yuan and hundreds of millions have shown an upward trend.The education industry is not so much experiencing the cold winter of capital, but more like self-weight loss.After the education industry itself precipitated, investors seemed to be more optimistic about relatively mature education companies than early-stage companies.04. The overall investment speed has slowed down. At the end of the year, the small-scale outbreak was still less than the average monthly number in previous years. 05. The early financing has decreased significantly, and the late investment has increased. The financing events in 2019 are still led by angel rounds and round A financing.The impact of the trend, the angel round decreased by 143 cases compared to last year, a drop of up to 70%; the A round decreased by 73 cases, a decrease of 51%.Correspondingly, the number of B-round financing events only decreased by 1 and decreased by 3%.Even the number of round D financing has increased.06. The capital market has taken a more calm shot, and the number of active institutions has dropped from 37 in 2018 to 8 (Note: Blackboard Insights has made more than five active shots in the year as active ones) This year’s education industry has made more than five shots including: New Oriental 13Times, 8 times for the future, 8 times for Bei Tower Capital, 7 times for Sequoia Capital China, 5 times for Yongying Investment, 5 times for Jingwei China, 5 times for learning (formerly Gauss Education), and CDH Investment.07. New Oriental lays out mid- to late-stage education enterprises. The number of shots in the future is reduced. Compared with the future, the speed of investment shots has slowed down. The number of shots made by New Oriental is relatively stable.From the perspective of previous data from the blackboard, the investment direction of New Oriental and Good Future in 2013 ~ 2018 is mainly in the early stage, and the data in 2019 shows that for the investment of angels and A-round enterprises, New Oriental made a total of 2 shots and a good future.1 time.However, it is worth noting that New Oriental participated in a total of 5 rounds of B financing in 2019, and looking back at the five years from 2013 to 2018, New Oriental participated in only 8 rounds of financing in total.08. STEAM succeeded K12 as the most popular education sector in the capital market. Although the total number of investment and financing events in 2019 dropped to 332, compared with 629 financing events last year, the overall trend is declining.However, under the premise of the downturn in the background, we have found that there are still some areas that continue to increase in financing events.We can see that the overall financing event in 2019 was led by STEAM, with a total of 79 financing events. K12 Education followed closely with a total of 55 investment events, while vocational education, corporate services, preschool education, and language training were 39, 34, respectively., 34, 29 investment events ranked 3 to 6.Compared with last year, each track has declined, but STEAM has taken over the banner instead of K12 and has become the most popular education segment for investors.Compared with a 75% drop in K12 education and a 70% drop in preschool education, STEAM is relatively stable with a 25% drop.It can be seen that, despite the calmness of the large industry, the STEAM education track has been least affected by the market, and there is huge potential in the future development process.Conclusion Looking back at 2019, in the context of the capital winter, the number of investment events in the education industry has decreased dramatically. From the perspective of financing rounds, the decline in financing in the early stage was the highest, and the number of rounds of financing in the middle and late stages was less affected.The field of STEAM is still receiving attention, while traditional K12 education has encountered financing “Waterloo”.Also as the country continues to promote the development of quality education content in the field of science and art, the market for expanding content education after class is on a hot trend, and this trend may continue in 2020.Respond to the keyword [2019] in the background of the “Blackboard Insight” public number, and you can get the 2019 annual investment table for the education industry.

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