With final exams on the horizon, China’s test prep startups rake in investments

China, as with many countries in Asia, relies heavily on standardized tests to determine the future paths of its students. Now, with the end of the school year in sight, those students look for any edge they can get before exam day. Standardized testing, while arguably not the most effective way to predict a student’s real-world success, has become a multibillion-dollar global industry.

Some startups in China are capitalizing on that captive market, and have announced funding just over two months ahead of the country’s infamous college entrance exam, the gaokao.

Yuan Tiku, which literally translates to "Ape Exam," just announced it completed a US$60 million series D round of funding, with a valuation of US$360 million, according to QQ Tech. CMC Capital Partners led the round, followed by New Horizon Capital, IDG Capital, and Matrix Partners China. Its US$15 million series C round came in July last year.

The app, which lets students do practice problems and assessments on their smartphones, claims to have 13 million high school students on board. The app’s algorithms can analyze a student’s strengths and weaknesses, and intelligently target him or her with questions to meet individual needs.

Yuan Tiku plans to launch live tutoring in the near future.

See: Jack Ma explains why China’s education system fails to produce innovators

English test prep help

Another test prep service from China, Xiaozhan Jiaoyu, last week secured a US$29 million series B round led by GGV Capital, according to Duozhi. Xiaozhan focuses on Chinese students who want to attend school abroad. The startup aims at students taking SAT, ACT, GRE, TOEFL, and IELTS exams.

The website offers an information portal with news, forums, practice tests, and other useful materials. It also sells live tutoring/training sessions with its 600 full-time teachers, 80 percent of whom have overseas work or study experience. TOEFL prep (test of English as a foreign language) is the most popular area of study on Xiaozhan, with over 50,000 students.

Xiaozhan plans to get more involved in the education business abroad, providing a custom recommendation service for colleges and universities.