Chinese App That Does Your Homework Is Now Worth Over $3 Billion

Extracurricular education is surely a big and profitable business in China. Yuanfudao is an online tutoring platform that is accompanied by a homework app using artificial intelligence. After students take a photo of their homework, this app can generate answers for them.

Yuanfudao claims that there are as many as 200 million users on its platform. The interest that the app receives from students and parents has translated into interest from investors. If it can live up to the hype, it could be a new path for educational technology, not just for students in China but also for those around the world.

Last Tuesday, Yuanfudao announced that it has received another fund worth $300 million, bringing the company’s valuation to over $3 billion. The investors include Tencent, the Chinese gaming and social networking giant, IDG Capital and Warburg Pincus, two international investment firms.

Yuanfudao said that it plans to put these investments into AI R&D (Research and Development), and to improve the experience of users when using its homework app.

While being able to get the answers to your homework sounds like a dream come true for lazy students, the homework app is the main moneymaker of Yuanfudao. The company said that most of its earnings are from its live courses.

Chinese students are likely to use the homework app to check if their answers are correct or not, instead of using it to not having to do their homework. Ultimately, by paying for Yuanfudao, the ultimate goal of students is to boost their exam scores. Therefore, skipping out on finishing their homework would be counterintuitive.

And Chinese parents would not be happy if their kids use the app for that purpose, either. On average, they spend around $17,400 per year for their children’s extracurricular tutoring. And with the latest funding of Yuanfudao, it seems like investors, as well as Chinese parents, are willing to invest a lot of money into tutoring companies.