SoftBank seeking to invest US$500 million in Baidu education spin-off

SoftBank Vision Fund is seeking to invest about US$500 million in China’s Zuoyebang as it seeks a stake in the country’s vast online education market, people familiar with the matter said.

The fund, created by SoftBank Group Corp., and Zuoyebang are still finalising terms of the deal and the details could still change, the people said, asking not to be identified as the details are private. The education technology startup has already raised more than US$500 million in funding from investors including Coatue Management, Goldman Sachs Group Inc., Sequoia Capital China and GGV Capital.

Founded in 2014 by Chinese search giant Baidu Inc., Zuoyebang targets primary and secondary school students in China. The company, which was spun out from Baidu a year later, created a mobile app that lets students upload homework questions and search for answers. Zuoyebang has also expanded into live-streaming courses and one-on-one mentoring, with a reported 300 million registered users.

China is one of the main investment locations for Tokyo-based SoftBank’s Vision Fund, an almost US$100 billion pool of money that’s become the world’s largest technology investor. It’s already backed businesses in sectors as diverse as robotics, ride-hailing, e-commerce and semiconductors. The fund has put billions into Chinese ride-hailing giant Didi Chuxing and taken stakes in ZhongAn Online P&C Insurance Co. and food-delivery upstart Ele.me.

Zuoyebang didn’t respond to requests for comment during the China holiday, while a representative for the SoftBank Vision Fund declined to comment.