Behind Softbank’s capital injection, online education ushers in the victory of “long-term principle”


Sun Zhengyi, CEO of Softbank group
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On December 28, homework help, the largest online education company in China, announced the completion of more than US $1.6 billion in E + round financing.
Towards the end of the year, this news immediately makes the online education K12 track which has not stopped fighting a wave again.
After all, in June this year alone, the head company had already received as much as $750 million in investment, and after only half a year, the capital again bet heavily on it.
Behind the two rounds of financing a year, what remains unchanged is the favor of investors.
Among them, Softbank, which has been well-known in the Chinese market for its investment in Alibaba, is even more appreciative and continuously reinvested.
In this situation, I can’t help but wonder what makes Softbank “never forget” the online education company, which has been established for only five years?
Soft silver is also crazy
This has to mention the investment philosophy of Softbank.
All along, in the VC industry, Softbank’s vision fund has been described as an open “subversive”.
In sun Zhengyi’s public speech, he mentioned more than once that Softbank’s minimum investment in a company is $100 million. This is also in line with his own consistent style: identify the goal, without hesitation.
Even in this era of turbulence and change, this does not seem to have changed.
Statistics show that in the past year, venture capital companies in the United States have invested a total of $131 billion, while sun Zhengyi’s Softbank and two vision funds have each invested more than $100 billion.
However, behind the crazy capital injection, Softbank is not a simple “local wealth giver”. Behind a series of investments, there is also a consistent investment philosophy.
Although “finding the next Ali” is not a day’s work, it does not prevent Softbank from moving forward in the direction of investing in technology giants.
Amazon, alphabet, nivida, Tesla, Nafi, zoom As Chris lane, an analyst at Bernstein research, put it, behind this series of investment lists with distinctive technical color:
“Softbank has been looking for new technology companies with the ability to change and reshape the market.”
In this process, sun Zhengyi is more interested in the market leaders who have entered the late stage of competition than the Darwinian competition in the early stage of the market.
“When Softbank invests, the winners are already obvious. Softbank’s capital is only used to consolidate their position.”
This is no exception when betting on K12 online education track.
According to the publicly disclosed data, from January to the end of November 2020, the online education industry disclosed 89 financing events, a year-on-year decrease of 34.56%.
Interestingly, by the end of November, the amount of financing disclosed by the online education industry in 2020 was as high as 38.8 billion yuan, an increase of 256.78% over the same period.
On the one hand, there is a decrease in financing events, on the other hand, there is a sharp rise in the amount of financing
In the field of online education, the complicated jungle fighting in the eyes of outsiders has been divided, and the anchor with investment value has quietly surfaced.
In the fierce competition to grow into China’s largest online education company “homework help”, it is also logical to become the only choice of Softbank.
The secret of homework help
In addition to Softbank, a number of investment institutions, including Alibaba, tiger global, Sequoia and Fangyuan, are optimistic about the future of the operation group.
As a result, the final actual transaction volume of this round of financing is 60% higher than the previous limit of $1 billion.
With all parties scrambling for investment, how can operation help win the favor of many investment institutions?
Data is the best answer.
As a young company founded in 2015, the development speed of homework help is amazing.
Up to now, the total daily activity of the products of Aobang has exceeded 50 million, the monthly activity has exceeded 170 million, and the cumulative activated user equipment has exceeded 800 million.
Moreover, the homework help super app is the only educational app that has entered China’s top 30. Based on the full scene, one-stop educational technology products and services such as photo search, intelligent exercises, homework correction, live class and VIP provided by AI and the world’s largest over 300 million question bank, it not only provides more in-depth question answering services for students, but also attracts more than 65 million live class students and 12 million students With the support of paid members, the membership scale ranks first in the industry.
Behind the outstanding performance, the brand’s deep understanding of traffic is indispensable, which is also the secret for homework help to stand out among the K12 online education brands.
From the first day of starting a business, Hou Jianbin has recognized the need to continuously invest in his own traffic.
This can be seen from the traffic closed loop created by the products of the operation group, or the traffic war during the enrollment in the cold and hot seasons.
In the past summer, homework help has created a total of 7.8 million students in paid courses, a year-on-year increase of more than 390%; in summer, the number of students in regular price courses has exceeded 1.71 million, a year-on-year increase of more than 350%; in autumn, the number of students in regular price courses has exceeded 2.2 million, almost equating XRS, and the number of students in paid courses has exceeded 10 million, setting an industry record.
On the one hand, it is inseparable from the catalysis of the epidemic to the online education market, on the other hand, it is also inseparable from the product power and flow logic.
Statistics show that in 2020, more than 67% of the new arrivals of regular price classes come from their own traffic, a full increase of 14 percentage points compared with 53% in 2019. Among them, only 33% of the new arrivals of regular price classes come from external investment, and most of them come from the transformation of the brand’s own traffic pool.

Unlike other online education brands, which can only rely on the advertising of real money and silver, the “traffic aggregation” brought by the super app of homework help has become the secret of their success in the industry. Relying on itself, followed by external traffic, online education has become a unique weapon in today’s world.
Even though the flow of students who are not converted into paid courses after the external purchase, more than two-thirds of the flow is still deposited in the homework help app, which has been continuously activated for a long time, becoming a member of the homework help’s own flow closed loop. This is the embodiment of super app aggregation effect.
Combined with the transformation of self owned traffic and external investment, the comprehensive customer acquisition cost of operation help is less than half of the industry average.
On this basis, the huge private domain flow pool not only avoids the high cost of acquiring customers, but also makes it possible for operators to achieve accurate touch of users’ needs by relying on Intelligent Matching and other technologies.
Simultaneous interpreting is not only the success of an educational brand, but also the successful combination of technological thinking and traditional online education.
K12 education track ushers in a “long-term activist”
To some extent, this also confirms what Hou Jianbin, founder and CEO of homework help, said in his public speech:
“Technology is the variable that really impacts the education industry.”
Compared with the stereotyped education companies and platform companies in the industry, the advantage of homework help is that they not only make achievements in the field of education and platform, but also maintain excellent advantages in technology and content.
In the face of the pain point of traditional online education mode, from “taking photos to search questions” to “intelligent practice” and then to “checking leaks and filling vacancies” of thousands of people and thousands of faces, homework help has been hoping to use the power of education + technology, and build a modern teaching and research system with big data + professional teachers, so as to realize thousands of people and thousands of faces, teach students in accordance with their aptitude, and make a contribution to the development of online education and the integration of online and offline education.
Behind this, it is also the embodiment of the long-term spirit of the homework gang.
Chen Chunhua describes the long-term doctrine as follows:
“In a changing environment, the only thing that can transcend change is long-term rather than opportunism.”
In such a long-lasting track as education, frequent money burning and competition are constantly lengthening the front line, which also means that every CEO needs to find his own milestone.
For the operation group, its milestone is not the listing and market share first, but the promotion of its core value.
Its appearance may be the increase of revenue scale and the expansion of business model, which is often the appearance of attracting the attention of capital and market, and the real core is the value manifestation as an auxiliary teaching method.
Beyond the importance of funds, it is the industry accumulation represented by teachers, teaching and research, and content.
After all, only online education, which can help students learn, can be trusted by parents, teachers and students and realize the long-term development of online education.
It means continuous investment in education and technology.
The long-term success of educational track means more patience, wisdom and long-term planning than quick success.
For all this, Hou Jianbin, who has gained “ammunition supplement” from Softbank, is still full of confidence.
(statement: This article only represents the author’s point of view, not Sina’s position.)