RISE Education, a Chinese provider of after-school English lessons which is backed by Bain Capital, enjoyed a strong debut on the Nasdaq Friday, closing up more than 14% on its first day of trade. The stock closed at US$16.61, compared to its initial public offering (IPO) price of US$14.50.
RISE’s IPO was well received, demonstrating investors’ continued interest in China’s fast-growing education sector. The company raised US$160 million by offering 11 million shares at US$14.50, higher than the expected price range of US$12 to US$14.
It marks the second successful U.S. IPO of a Chinese education company this year, following the US$158 million IPO of Bright Scholar Education Holdings on May 18. That listing was also oversubscribed and priced above its offering price range. Bright Scholar is the largest operator of international and bilingual schools in China.
The size of China’s education market is expected to grow from 1.6 trillion yuan (US$250 billion) in 2015 to 2.9 trillion yuan (US$440 billion) by 2020, according to Deloitte. As such, the sector continue to attract extensive investment from major Chinese and international investment firms.
In August, Sequoia Capital China led a US$200 million series D round in Vipkid, a Chinese K-12 online education platform, in what the company called the largest funding round to date in the nation’s K-12 online education sector. Tencent Holdings Ltd., Matrix Partners China, Yunfeng Capital and Zhen Fund also participated in the round. Also in that month, China-focused venture capital firm H Capital led a US150 million series C round in Zuoyebang, a K-12 online education spin-off from Baidu Inc.
In May, Global private equity giant Warburg Pincus led a US$120 million new funding round in Yuanfudao, a K-12 online learning and teaching platform in China formerly known as Yuantiku. Existing investor Tencent Holdings Ltd. also participated in the round.
And in March, IFC, a member of the World Bank Group, invested US$25 million in Minsheng Education Group Co., Ltd. as a cornerstone investor in the company’s initial public offering on the main board of the Hong Kong Stock Exchange.
Source: China Money Network
