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China’s Sunlands Online Education Files For $300M IPO In New York

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Chinese online education service Sunlands Online Education Group has filed an applications for an initial public offering of up to US$300 million with the U.S. Securities and Exchange Commission.

The company plans to trade on the New York stock exchange, with the code STG. Goldman Sachs Asia, Morgan Chase and Credit Suisse are joint bookkeeper for the IPO.

Founded in 2003 as a traditional education company, Sunland transitioned to an online education model in 2014. It claims to be China’s largest online post-secondary and professional education service in terms of gross billings in 2017, citing iResearch. The company says its serves approximately 550,000 students across China, offering degree- and diploma-oriented post-secondary courses via an online platform. The company also offers online professional courses and educational content for people preparing for professional certification exams.

Gross billings for the six months ended June 30, 2017 was RMB912.5 million (US$134.6 million), an increase of 187.8% from RMB317.1 million in the same period of 2016, according to the filing. Net revenue for the six months period was RMB361.5 million (US$53.3 million). The company saw a net loss of RMB231.8 million (US$34.2 million) in the period.

Online education has been one of the hottest sectors for fundraising in recent years. In January, American private equity firm Warburg Pincus’s affiliate and Genesis Capital have invested US$120 million in a series D round in Chinese online tutoring start-up Zhangmen. In the same month, U.S. investment firm Tiger Global Management and New York Exchange-listed education and technology firm TAL Education invested in a US$100 million series C round in Chinese online one-on-one English education platform DadaABC.


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