Beijing-based ed tech company 17 Education and Technology is seeking to raise $100 million in an initial public offering in the US.
The company has filed a prospectus with the US Securities and Exchange Commission (SEC).
17 Education and Technology offers a classroom solution to schools delivering teaching, learning, and assessment products for teachers, students, and parents, which is use in more than 70,000 K12 schools. The company also provides an after-school tutoring service.
The company stated it will use the funding to invest in its after-school tutoring services, as well as product enhancement and the educational content of its in-school classroom product. Investment will also be channelled into its technology infrastructure and sales, marketing and brand promotion.
The company is so far unprofitable, losing $99.6 million in 2018, $141.9 million last year, and $143.6 million in the nine months ending 30 September this year.
17 Education and Technology raised $250 million in a Series E funding round led by Temasek Holdings in 2018. The company is also backed by others, including Tiger Global, Shunwei Capital, and DST Global.
The firm’s plans to float have been made public amid reports that the SEC will require Chinese companies with shares listed in the US to use auditors overseen by American regulators – or risk being delisted.
According to reports, the SEC is now in the process of drafting regulations with an aim to issue it for public comment in December.
The move is designed to prevent Chinese companies, which at present do not have to disclose auditing files to US regulators, from defrauding foreign investors.
GSX Techedu, a China-based US-listed online tuition provider, is currently under investigation by the SEC over claims by short-sellers that it has fabricated its financials and ‘brushed’ enrolment figures.
Date published: 19 November 2020