China’s Dianping acquires education app Haizixue

Yesterday, Chinese online ratings and deals service Dianping announced that it has acquired O2O education service Haizixue. The sum of the acquisition was not disclosed, and Haizixue will continue to operate independently from Dianping, although its founder Lu Guangyu has joined Dianping as COO. He will also remain chairman of the Haizixue board.

Haizixue is an O2O mobile app for Android and iOS that aims to connect parents, students, and teachers to help foster the extracurricular education of China’s children. The app allows parents to do things like search for extra teachers and classes, and pay any associated signup fees online. Teachers, similarly, can use it to set up classes and recruit students. Lu Guangyu founded the company in late 2013, and in 2014 it raised a series A round in the “tens of millions” RMB (hundreds of thousands USD) from Amoeba Capital Partners.

Monday’s acquisition was likely funded by Dianping’s rumored recent funding of US$850 million. It’s not clear whether that deal has come through yet but clearly the company thinks it has cash to burn. Haizixue gives Dianping an in to China’s red hot O2O market, and the fast-growing online education sector. But growth will not be easy, as a number of other online education startups have also gotten big boosts recently.

For example, last month Chinese online education startup 17zuoye raised US$100 million in a series D round that attracted big names like Lei Jun and Yuri Milner. 17zuoye fills a different niche than Haizixue, as do many of China’s other recently-funded education apps, but as the top apps bring in more and more funding, they’re likely to expand into other areas of e-education. There are battles ahead for any company operating in this sector.