NetBig, an online education company operating in the Greater China region, has secured second round funding from three top venture-capital and technology companies. Charles Huang, CEO and founder of NetBig, says that the funding amounts to around $15 million and comes from deals with Vertex Asset Management, Creative Technology and WW Global Technology Partnership.
Huang, a former head of securitization at Deutsche Bank in Hong Kong, and two of his former classmates started NetBig last year and received their first round of funding in October. That round was led by Hong Kong-listed Sino Land and injected $10 million into the company. Since then NetBig has focused on growing the two disparate parts of its business - providing online education services to China, Taiwan and Hong Kong through its NetBig.com website; and providing enterprise resource planning systems for book retailers and publishers in China through its Bayakala network.
The Bayakala network allows NetBig to offer over 500,000 titles on its online bookstore, but more importantly for traditional book retailers it provides technology for tracking inventory and orders. Bayakala's proprietary technology acts as an efficient communication network between retailers, distributors and publishers, and Huang says that it tracks over 30% of China's total retail market through the 110 book stores currently using the system.
Graduation day
NetBig.com has a range of free content focused on the needs and interests of youth that ranges from dating tips to job boards and rankings of China's top universities. The site claims over 10 million page views a day and around 500,000 registered users. But Huang says that the main money-making component of the site is the subscription-based tutorials that NetBig has developed by hiring primary and secondary school teachers to develop an online curriculum. There are around 35,000 subscribers to NetBig's tutorials, and Huang says they spend an average of Rmb1,500 ($181.20) over the course of a year. That equates to an annual revenue of around $6.3 million.
Sometime in the third quarter this year NetBig plans to graduate its e-learning system to include online degrees from colleges and universities. According to Huang, deals have already been inked with many of China's top universities and, partly due to the recent appointment of Professor Tien Chang Lin to NetBig's advisory board, an agreement has also been reached with the University of California Berkeley. Professor Tien is a member of the US National Science Board, but before that spent seven years as chancellor of UC Berkeley.
Online education is a hot sector in China's internet market and there is a lot of competition between commercial sites, government-sponsored initiatives and the websites of individual schools and universities. The proliferation led Wei Yu, deputy minister of education, to try and assert some government authority in April. The People's Daily newspaper reported the official as saying that substandard sites would be "eliminated" and that online educational information is "a part of the socialist education system", so only the Ministry of Education has the right to manage the service.
But NetBig's size and popularity should help it gain continuing government approval for its online education facilities. The only thing that remains to be seen is how much money can be made from the educational yearnings of Greater China's youth.
