(Bloomberg) — Chinese online tutoring platform Zuoyebang has confidentially filed for an IPO in the United States, according to sources familiar with the matter, who said the move could signal an easing of Beijing’s crackdown on private education companies.
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The company is working with advisers on a possible listing that could take place as early as this year, the sources said, speaking on condition of anonymity. The company could raise less than $100 million from its stock sale, one of the sources said.
The planned stock sale comes more than two years after China launched a campaign against the online tutoring sector, which was one of the country’s most important investments. The restrictions included prohibiting companies that teach the school curriculum from making a profit, raising capital or going public. The crackdown shocked global investors and decimated much of the $100 billion industry.
Read more: China to restructure ‘capital-hijacked’ education sector
Deliberations are ongoing and the company could still decide not to pursue a U.S. IPO, the sources said. A company representative did not immediately respond to a request for comment.
This file confirms signs that Beijing is seeking to strengthen financing channels for its technology industry. China’s securities regulator said on Friday it would support overseas listings of technology companies and encourage share sales in Hong Kong. Self-driving startup Pony.ai has received approval from the China Securities Regulatory Commission for an IPO in the United States, according to a statement Tuesday.
Chinese listings in the United States have collapsed in recent years due to tighter scrutiny by regulators. Since the start of 2022, only one Chinese IPO in the United States has topped $100 million: Hesai Group, a developer of sensor technologies used in self-driving cars. That’s a far cry from 2021, when a dozen companies each raised more than double that figure, according to data compiled by Bloomberg.
Beijing-based Zuoyebang, whose backers include Alibaba Group Holding Ltd., HongShan Capital and Softbank Vision Fund, now offers educational tools and engages in the use of artificial intelligence technologies to facilitate teaching and learning, according to its website.
The company is a spin-off from Chinese search engine titan Baidu Inc and was founded in 2015 by former Baidu executive Hou Jianbin. In 2021, Zuoyebang aimed to go public in the United States to raise at least $500 million before the crackdown derailed its plans.
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