Warburg-backed Chinese edtech firm eyes $300m in US IPO, sources say

The edtech startup has had discussions with potential advisers, and it could start the sales of its shares as soon as next year, said the sources. However, discussions are still at an early stage and nothing has been decided yet.

Founded in 2005, Zhangmen started its business by offering offline after-school tutoring classes. In 2014, it shifted to provide one-on-one online tutoring for students from age 4 to 18 years old.

To date, it claims to have over 60 million registered users across 600 cities in China.

In September, the company reportedly secured over US$400 million in fundraising from SoftBank, Genesis Capital, CPP Investments, the World Bank’s IFC, and CMC Capital Group.

Prior to that, it had closed US$120 million in a series D round from Warburg Pincus and Genesis Capital in 2018, followed a year later by US$350 million in series E1 funding from CMC Capital Group, China Investment Corporation, and CICC Alpha, a subsidiary of China International Capital Corporation.

Zhangmen’s additional investors include Shunwei Capital, which is co-founded by Xiaomi’s chairman Lei Jun, China Renaissance, Qingsong Fund, and Fortune Capital.