Edtech has benefited from covid-19 restrictions, the record high for capital in the sector was $2.4bn in 2018

Internet company Tencent co-led a $1bn series G round with investment management firm Hillhouse Capital in China-based online education platform Yuanfudao. Private equity firm Boyu Capital and venture capital group IDG Capital also participated.

The funding was reportedly raised at a $7.8bn valuation.

Tencent is a returning investor, having first committed capital in 2015 when it co-led a $60m series D round with CMC Capital Partners and New Horizon Capital.

The Series G boosted Yuanfudao’s overall funding to about $1.54bn. The company plans to channel the funding into improving the user experience, while ramping up R&D on artificial intelligence.

Spun out of social media platform Fenbi in 2014, Yuanfudao provides app-based tutoring services that include live courses, homework help and mock exam problems, covering primary and secondary school age. Parents can also use track their child’s learning.

Claiming more than 400 million registered users, Yuanfudao has benefited from an increase in activity as restrictions related to the Covid-19 pandemic force students to stay away from schools and learn at home.

This is one of the largest reported recent rounds in the broader edtech space, which has seen much attention by corporate investors in the past decade.

We saw a peak in corporate-backed deals in edtech in 2019 with 72 recorded rounds, while the total estimated capital in those rounds reached a record high at $2.4bn in 2018.