Sino Inno Cap




In the education industry, as the last two years have been marked by layoffs and business reductions, the future of the education and training industry is uncertain. In the first half of 2021, there were 133 investment and financing events in the education industry, totaling approximately 14,535.8 million RMB, excluding undisclosed amounts. [1] Compared with the 113 events in the first half of 2020, the number of financing events increased by 20, or about 15%. However, it is worth noting that while the number of financing events increased, the total amount of financing was lower than that of the same period last year (total financing amount of 17,657.5 million RMB in the first half of 2020), shrinking by 17.68%. The policy is still uncertain, and capital is also relatively conservative, so large investment is more cautious.

Though children’s education was recently regulated–companies engaged in subject-based training and education are prohibited from raising capital or going public–the market is still large in China as the tracks for quality education, adult education, vocational education, overseas business, and education hardware market are gradually heating up. [2] K12 (the education from kindergarten to 12th grade), which was previously in a good position, was in a bit of a slump in 2021, with only seven financing events in the first half of the year due to restrictions on low-level kids’ subject training. What was encouraging to the VC investors was that in the first half of 2021, enterprise services, quality education, and vocational education had the highest investment amounts, with the total financing amount of the three reaching 11.6 billion RMB, accounting for about 80% of the total financing amount in the first half of the year.

Within the education industry segments in 2021, the financing of corporate services was the highest, with 37 cases accounting for 27.81% of the total financing of the education industry. Quality education (aims to comprehensively promote the moral, intellectual, physical, and aesthetic development of the educated, with emphasis on cultivating the spirit of innovation, practical ability, and personality development.) and vocational education also performed well. Quality education ranked second in the first half of this year with 31 funding cases, and vocational education followed with a narrow margin.

Since the release of the “14th Five-Year Plan” (from 2020), the new economic pattern of pursuing high-quality development has put forward higher requirements for the upgrading and adjustment of China’s industrial structure, including the structure of the education industry. In the future, the capital market will continue to increase its support for China’s vocational education because the shortage of highly skilled personnel has become a major bottleneck for employment structure optimization and industrial transformation after the introduction of Made in China 2025.