Xiaomi’s five-year plan is a $1.5 billion bet on smart homes

Xiaomi, the Chinese company best known for budget phones, is betting big on a future of connected homes. It plans to plough at least 100 billion yuan, or $1.48 billion, into the so-called “AIoT” sector over the next five years, founder and chief operating office Lei Jun announced on Friday.

AIoT, short for “AI + IoT,” is an upgrade from devices connected to the internet, known as the Internet of Things. AIoTs are intelligent, run on automated systems and can learn from users’ habits, like lights that automatically turn on when you get home.

“We see a future where all home devices will be connected to the internet and controlled by voice. A wave of home appliances will be replaced by smart devices. There will be an AIoT network that infiltrates every second and scenario of people’s lives, collecting mountains of users, traffic and data,” said Lei in his annual address to employees.

The plan is to get all sorts of gadgets, not just handsets, onto Xiaomi’s operating system so the company can hawk services through these devices. The move comes as Xiaomi, the world’s fourth-largest smartphone vendor, copes a weakening market. Smartphone shipments in China were down more than 15 percent year-over-year in 2018, according to a government-backed research institute.

Phones remain strategically important to Xiaomi as it looks to lower-end phones for growth. On Thursday, the company announced it has split up (not spin out) its budget phone brand, Redmi, in hope of launching “red rice” — what Redmi means in Chinese — to Xiaomi’s “little rice” stardom. The strategy is similar to how Huawei operates sub-brand Honor for its line of cheaper phones.

Xiaomi’s new billion-dollar pledge is a continuation of a plan in 2013 to back 100 startups over the course of five years. These portfolio companies, in turn, helped make Xiaomi products, which now count 132 million total devices among which 20 million are active daily. Meanwhile, Xiaomi’s voice assistant Xiao Ai has hit 100 million installs.

These gadgets, along with an assortment of lifestyle products like suitcases and umbrellas, became the largest revenue driver for Xiaomi in the second quarter of last year, the company’s earnings report shows.

Xiaomi is in a land grab with other Chinese tech giants like Baidu to enter people’s homes. It’s becoming something akin to a department store, but it can’t make everything itself. Recently, the giant made a big push in TVs through a partnership with a veteran Chinese home appliance manufacturer. It’s also teamed up with IKEA on a 100 million yuan ($14.8 million) fund for third-party developers, which will enrich Xiaomi’s inventory as consumers in China may soon be able to buy many Xiaomi-powered furniture from the Swedish retailer.

World’s most valuable AI startup SenseTime unveils self-driving center in Japan

The world’s highest-valued artificial intelligence startup SenseTime has set foot in Japan. The Beijing-based firm announced on Friday that it just opened a self-driving facility in Joso, a historic city 50 kilometers away from Tokyo where it plans to conduct R&D and road test driverless vehicles.

The initiative follows its agreement with Japanese auto giant Honda in 2017 to jointly work on autonomous driving technology. SenseTime, which is backed by Alibaba and last valued at more than $4.5 billion, is best known for object recognition technologies that have been deployed in China widely across retail, healthcare and public security. Bloomberg reported this week that the AI upstart is raising $2 billion in fresh funding,

Four-year-old SenseTime isn’t the only Chinese AI company finding opportunities in Japan. China’s biggest search engine provider Baidu is also bringing autonomous vehicles to its neighboring country, a move made possible through a partnership with SoftBank’s smart bus project SB Drive and Chinese automaker King Long.

Japan has in recent years made a big investment push in AI and autonomous driving, which could help it cope with an aging and declining workfoce. The government aims to put driverless cars on Tokyo’s public roads by 2020 when the Olympics takes place. The capital city said it already successfully trialled autonomous taxis last August.

SenseTime’s test park, which is situated near Japan’s famed innovation hub Tsukuba Science City, will be open to local residents who could check out the vehicles slated to transport them in a few years.

“We are glad to have the company setting up an R&D center for autonomous driving in our city,” said Mayor of Joso Takeshi Kandatsu in a statement. “I believe autonomous driving vehicles will bring not only revolutionary changes to our traffic system, but also solutions to regional traffic problems. With the help of SenseTime, I look forward to seeing autonomous cars running on the roads of Joso. We will give full support to make it happen.”

China’s Baidu says its answer to Alexa is now on 200M devices

A Chinese voice assistant has been rapidly gaining ground in recent months. DuerOS, Baidu’s answer to Amazon’s Alexa, reached over 200 million devices, China’s top search engine announced on its Weibo official account last Friday.

To put that number into context, more than 100 million devices pre-installed with Alexa have been sold, Amazon recently said. Google just announced it expected Assitant to be on 1 billion devices by the end of this month.

Voice interaction technology is part of Baidu’s strategy to reposition itself from a heavy reliance on search businesses towards artificial intelligence. The grand plan took a hit when the world-renown scientist Lu Qi stepped down as Baidu’s chief operating officer, though the segment appears to have scored healthy growth lately, with DuerOS more than doubling from a base of 90 million installs since last June.

When it comes to how many devices actually use DuerOS regularly, the number is much less significant: 35 million machines a month at the time Baidu’s general manager for smart home devices announced the figure last November.

Like Alexa, which has made its way into both Amazon-built Echo speakers and OEMs, DuerOS also takes a platform play to power both Baidu-built and third-party devices.

Interestingly, DuerOS has achieved all that with fewer capabilities and a narrower partnership network than its American counterpart. By the end of 2018, Alexa could perform more than 56,000 skills. Devices from over 4,500 brands can now be controlled with Alexa, says Amazon. By comparison, Baidu’s voice assistant had 800 different skills, its chief architect Zhong Lei revealed at the company’s November event. It was compatible with 85 brands at the time.

This may well imply that DuerOS’s allies include heavy-hitters with outsize user bases. Baidu itself could be one as it owns one of China’s biggest navigation app, which is second to Alibaba’s AutoNavi in terms of number of installs, according to data from iResearch. Baidu said in October that at least 140 million people had activated the voice assistant of its Maps service.

Furthermore, Baidu speakers have managed to crack a previously duopolistic market. A report from Canalys shows that Baidu clocked in a skyrocketing 711 percent quarter-to-quarter growth to become China’s third-biggest vendor of smart speakers during Q3 last year. Top players Alibaba and Xiaomi, on the other hand, both had a sluggish season.

While Baidu deploys DuerOS to get home appliances talking, it has doubled down on smart vehicles with Apollo . The system, which the company calls the Android for autonomous driving, counted 130 OEMs, parts suppliers and other forms of partners as of last October. It’s attracted global automakers Volvo and Ford who want a foothold in China’s self-driving movement. Outside China, Apollo has looked to Microsoft Azure Cloud as it hunts for international partnerships.

Baidu has yet to prove commercial success for its young AI segment, but its conversational data trove holds potential for a lucrative future. Baidu became China’s top advertising business in part by harnessing what people search on its engine. Down the road, its AI-focused incarnation could apply the same data-crunching process to what people say to their machines.

In major TV push, China’s Xiaomi buys 0.5% stake in TCL

A veteran TV maker just got a notable refresh as it enters the age of connected devices. Xiaomi, the Beijing-based firm best known for budget smartphones, has bought 65.2 million shares, or 0.48 percent, of Chinese home appliance maker TCL, said TCL in a statement to the Shenzhen Stock Exchange on Sunday.

Shares of TCL, the world’s third-largest LCD TV manufacturer, jumped nearly 4 percent in morning trading on Monday, giving the company a market cap of $36 billion.

The financial gesture deepens an existing alliance between the duo. On December 29, the companies signed a strategic partnership that would see them collaborate on various fronts, including R&D in integrating smart devices with “core, high-end, and basic” electronic parts. To put in layman’s terms, the joint effort focuses on chips and will make it easier for TCL devices to incorporate into Xiaomi’s operating system, where an expanding universe of third-party gadgets reside. The partners may also make co-investments in the hardware field.

The tie-up provides “tremendous help” for Xiaomi as it ups the ante in home appliances, wrote Xiaomi founder and CEO Lei Jun on Weibo, China’s closest answer to Twitter, in a reply to TCL’s CEO Li Dongsheng. During the third quarter of 2018, smart TVs helped drive revenue growth for Xiaomi’s non-smartphone hardware segment, shows the company’s financial results.

“[Our partnership] helps facilitate the transformation and upgrade of China’s manufacturing industry,” wrote Li, whose company started in 1981 as a cassette manufacturer.

Xiaomi has long been keen to team up with manufacturers to make its own branded devices instead of producing them itself. By early 2018, Xiaomi reached nearly 100 such partners, many of which Xiaomi had invested in to harness bargaining power in the supply chain, from what a smartphone should look like to how much it’s priced at. Xiaomi’s retail stores — available online and in physical manifestations — have also opened doors to third-party brands in an effort to broaden product selection.

Xiaomi’s close ties with its ecosystem partners result in an inventory of affordable products rivaling the likes of Fitbit and Apple. During the third quarter of 2018, Xiaomi topped the global chart by shipping 6.9 million units of wearables. Apple and Fitbit came in second and third with 4.2 million units and 3.5 million units, respectively, according to market research firm IDC.

Xiaomi derives most of its revenues from smartphones, though Lei Jun has long envisioned a future in which internet services will be the firm’s main force. This segment, which Xiaomi has marketed as its key financial differentiator against other phone brands, includes sales from mobile games, internet finance, paid content among a slew of services available through Xiaomi’s connected devices.

Singapore activist found guilty of hosting ‘illegal assembly’ via Skype

An ongoing case in Singapore is testing the legal boundaries of virtual conferences. A court in the Southeast Asian city-state this week convicted human rights activist Jolovan Wham of organizing a public assembly via Skype without a permit and refusing to sign his statement when ordered by the police.

Wham will be sentenced on January 23 and faces a fine of up to S$5,000 or a jail term of up to three years. The judge in charge of the case, however, has not provided grounds of his decision, Wham wrote on Twitter.

Wham, 39, is a social worker at Community Action Network Singapore consisting of a group of activists, social workers and journalists advocating civil and political rights. He previously served as executive director of migrant worker advocacy group Humanitarian Organisation for Migration Economics.

On November 26, 2016, Wham organized an indoor forum called “Civil Disobedience and Social Movements” at a small event space inside a shopping mall in Singapore. The event featured prominent Hong Kong student activist Joshua Wong who addressed the audience remotely via a Skype video call.

The event’s Facebook Page indicates that 355 people were interested and 121 went. The Skype discussion, which lasted around two hours, was also live streamed on Facebook by The Online Citizen SG, a social media platform focused on political activism, and garnered 5,700 views.

Despite being advised by the police prior to the event to obtain a permit, Wham proceeded without said consent, according to a statement by the Singapore Police Force. Wham faced similar charges of organizing public assemblies without police permits and refusing to sign statements under the Penal Code.

In Singapore, it is a criminal offence under the Public Order Act to organize or participate in a public assembly without a police permit. The Police described Wham’s act as “recalcitrant” in regard to organizing and participating in illegal public assemblies.

Commenting on the charge against Wham, a joint statement from Joshua Wong and members of CAN Singapore argued that the event was “closed-door”.

“Skype conversations that take place within the confines of a private space are private matters that should logically, not require permits before they can be carried out,” raged the statement. “Wham’s discussion with Wong ended peacefully and would not have drawn any further attention if authorities hadn’t decided to act.”

“It was a discussion about civil disobedience and social movements,” Wham pointed out in another Twitter post. “The law says that any event which is open to the public, and is ’cause related’, requires a permit when a foreigner speaks. What is considered ’cause related’ isn’t clear.”

Tencent AI Lab loses key executive

Chinese internet giant Tencent just lost a leading artificial intelligence figure. Zhang Tong, who previously worked at Yahoo, IBM and Baidu, has stepped down after directing Tencent’s AI Lab for nearly two years.

The scientist will return to academia and continue research in the AI field, Tencent confirmed with TechCrunch on Thursday, adding that it hasn’t appointed a successor.

”We are grateful for [Zhang]’s contributions to Tencent AI Lab and continue to explore fundamental and applied research that can make the benefits of AI accessible to everyone, everywhere,” Tencent said in a statement.

Zhang’s departure is the latest in a handful of top AI scientists quitting large Chinese tech firms. In 2017, search giant Baidu lost its chief scientist Andrew Ng who started Google’s deep learning initiative. Last year, the firm suffered another blow as renown AI expert Lu Qi resigned as chief operating officer and moved onto spearheading Y Combinator’s newly minted China program.

Talent is key to a tech firm’s AI endeavor, for a revered leader not only inspires employees but also boosts investor confidence. Baidu stocks plunged following Lu’s exit as markets weighed on the talent gap inside the company, which had poured resources into autonomous driving, smart speakers among other AI efforts. Tencent itself had poached Zhang from Baidu’s Big Data Lab to ramp up its own AI division.

Tencent is best known for its billion-user WeChat messenger and being the world’s largest video game publisher, but it’s also been doubling down on machine learning R&D to serve users and enterprise clients. It launched the AI Lab in April 2016 and opened its first U.S. research center in Seattle a year later to work on speech recognition and natural language processing (NLP).

The AI Lab dives into machine learning, computer vision, speech recognition and NLP. Meanwhile, the social and entertainment giant also works to put fundamental research to practical use, applying AI to its key businesses — content, social, online games and cloud computing.

One beneficiary has been WeChat, which applies NLP to enable seamless dialogues between users speaking different languages. Another case in point is Tencent’s news aggregator Tiantian Kuaibao, which deploys deep learning to recommend content based on readers’ past preference. Kuaibao is a direct competitor to Jinri Toutiao, the popular AI-powered news app run by TikTok’s parent company ByteDance.

To date, Tencent’s AI Lab has a team of 70 research scientists and 300 engineers, according to information on its website. Tencent operates another AI initiative called the Youtu Lab, which focuses on image understanding, face recognition, audio recognition and optical character recognition. While its sister AI Lab falls under Tencent’s research-focus Technology Engineering Group, Youtu is the brainchild of the Cloud & Smart Industries Group, a new unit that Tencent set up during its major organizational reshuffle in October to place more emphasis on enterprise businesses.

The end of China’s ride-sharing gig

Over the last few years, millions of Chinese workers managed to earn extra money by being ride-hailing drivers. Many picked the gig because of its flexible schedule. For those who could not otherwise afford to own a car in China’s pricy metropolises, driving around is also a status symbol, even if they are paying off car loans every month.

Most drivers on Didi Chuxing — the startup that captured 90 percent of China’s e-hailing trips in 2017 per consulting firm Bain & Company — were part-time. That’s according to a report Didi put out in October 2017, which said half of its drivers worked less than two hours a day.

The report also hailed Didi as the epitome of China’s “sharing economy,” something that Beijing has been keen to promote to spur economic growth. The all-encompassing term, which includes shared platforms from mobility to elderly care services, raked in $764 billion in 2017, shows a report by China’s Sharing Economy Research Center of the State Information Center.

But gig work in China’s fledgling ride-hailing industry is coming to an end as new regulations make part-time driving overly expensive.

No more gigs

On January 1, ride-hailing apps in China start banning drivers who operate without the required “double licenses”: one for drivers and another for the cars they steer. Municipal governments across the country have nuanced stipulations for what these certificates entail, but in general, the fresh rules aim to more closely vet drivers transporting passengers around.

To obtain the ride-hailing driver’s permit in certain cities, drivers must own a local hukou, the residency permit that controls where people can legally work. A lot of ride-hailing drivers don’t have an urban hukou as they are migrant workers from rural parts of China, so they immediately become ineligible for ride-hailing apps.

The car license, on the other hand, requires the vehicle to operate as a commercial one, bringing additional costs to drivers who must absorb the costs of car insurance and maintenance, and scrap their vehicle after 8 years.

didi chuxing

All ride-hailing vehicles in China must possess the required license (circled in red) to be on the roads starting January 1, 2019. Photo credit: TechCrunch

Under the new legal framework, drivers can still work as independent contractors. But in effect, the policy shift is driving out casual workers. “No part-time drivers want to register their private car as a commercial one because of the high costs that come with it,” a Shenzhen-based Didi driver tells TechCrunch. “Being part-time doesn’t pay the bills anymore.”

Didi’s dilemma

Like a lot of China’s nascent industries, ride-hailing took off quickly in part thanks to relatively lax government oversight at the start. The first set of industry laws took effect in 2016 when the country officially legalized apps like Uber, which was later acquired by its local competitor Didi. Since then Chinese authorities have gradually rolled out more rules and the strictest regulations, including the rollout of the double licenses, came following the deaths of two passengers who used Didi last year.

The new policies have put a squeeze on driver and car numbers. In the Tier 2 city of Nanjing alone, Didi claims to have weeded out more than 160,000 illegal vehicles, local media reported. The sharp decline in cars available on the roads inevitably leads to longer wait time and user frustration, and the $56 billion giant will need to think of ways to maintain a constant supply of drivers.

Didi took off on account of generous subsidies for both users and drivers, but its staggering loss — which is said to stand at $585 million in the first half of 2018 — means it may not be offering cash-heavy incentives in the near term. To retain labor, Didi is offering test prep for drivers. It’s also lowered the barriers to entry by letting drivers rent licensed cars it sources from car rental and automaker partners. A catchphrase started to pop up on Didi’s mobile app for drivers in December: “You supply the manpower, we provide the car.”

Aside from regulatory hurdles, Didi also faces new challengers like BMW and Volkswagen’s China partner SAIC Motor, traditional carmakers that are entering the ride-hailing scene.

“Didi has educated China about what is ride-hailing. If it doesn’t react swiftly to changing dynamics, the billions of yuan it’s burned through will suffer from low returns,” Dong Feng, founder of a Chinese car rental startup suggests to TechCrunch.

Alibaba-backed Hellobike bags new funds as it marches into ride-hailing

2018 has been a rough year for China’s bike-sharing giants. Alibaba-backed Ofo pulled out of dozens of international cities as it fought with a severe cash crunch. Tencent-backed Mobike puts a brake on expansion after it was sold to neighborhood services provider Meituan Dianping. But one newcomer is pedaling against the wind.

Hellobike, currently the country’s third-largest bike-sharing app according to Analysys data, announced this week that it raised “billions of yuan” ($1 = 6.88 yuan) in a new round. The company declined to reveal details on the funding amount and use of the proceeds when inquired by TechCrunch.

Leading the round were Ant Financial, the financial affiliate of Alibaba and maker behind digital wallet Alipay, and Primavera Capital, a Chinese investment firm that’s backed other mobility startups including electric automaker Xpeng and car trading platform Souche. The fledgling startup also got SoftBank interested in shelling out an investment, The Information reported in November. The fresh capital arrived about a year after it secured $350 million from investors including Ant Financial.

As China’s bicycle giants burn through billions of dollars to tout subsidized rides, they’ve gotten caught up in financial troubles. Ten months after Ofo raised $866 million, the startup is reportedly mulling bankruptcy. Meanwhile, Mobike is downsizing its fleet to “avoid an oversupply,” a Meituan executive recently said.

It’s interesting to note that while both Ofo and Hellobike fall under the Alibaba camp, they began with different geographic targets. By May, only 5 percent of Hellobike’s users were in China’s Tier 1 cities, while that ratio was over 30 percent for both Mobike and Ofo, a report by Trustdata shows.

This small-town strategy gives Hellobike an edge. As the bike-sharing markets in China’s major cities become crowded, operators began turning to lower-tier cities in 2017, a report from the China Academy of Information and Communications Technology points out.

The new contender is still dwarfed by its larger competitors in terms of user number. Ofo and Mobike command 43 million and 38 million unique monthly mobile installs, respectively, while Hellobike stands at 8 million, accroding to iResearch.

Hellobike’s ambition doesn’t stop at two-wheelers. In September, it rebranded its Chinese name to HelloTransTech to signify an extension into other transportation means. Aside from bikes, the startup also offers shared electric bikes, ride-hailing and carpooling, a category that became much contested following high-profile passenger murders on Didi Chuxing .

In May and August, two female customers were killed separately when they used the Hitch service on Didi, China’s biggest ride-hailing platform that took over Uber’s China business. The incidents sparked a huge public and regulatory backlash, forcing Didi to suspend its carpooling service up to this day. But this week, its newly minted rival Hellobike decides to forge ahead with a campaign to recruit carpooling drivers. Time will tell whether the latecomer can grapple with heightened security measures and fading customer confidence in riding with strangers.

Alibaba just gave Chinese youth another reason to never leave their desk

People in China have a host of reasons not to go outdoors these days. They may be too busy to leave their office, wary of air pollution or have chosen to live isolated lives. Among them is an expanding young consumer base who prefers to dwell in the virtual world of video games, animes and comics over the tangible reality. More important, there’s an endless list of startups pandering to their impulse to stay indoors with services from online shopping to food delivery.

Two Chinese internet giants are chasing after this indoorsy crowd. Last week, food delivery giant Ele.me announced that it’s teamed up with youth entertainment site Bilibili on a one-off joint membership that will further keep young consumers at their desk.

Ele.me, which means “are you hungry?” in Chinese, was sold to ecommerce behemoth Alibaba in April. Bilibili, which went public in the U.S. this year, started as a video streaming service focused on animes and has evolved into a one-stop destination for all things related to youth cultures: Animes, comics, cosplay, video games and other niches that you and I may fail to name.

Their marriage gives subscribers the best of both worlds: Unlimited streaming of animes and deep discounts on food delivery orders. Bilibili has been doubling down on content investments in recent months, which saw it agree to buy out most of the comics assets of Netease, one of China’s largest internet companies. What’s better than binging on one’s favorite anime series and not having to leave home when the stomach growls? (Whether this is a healthy lifestyle is another topic.)

The promotion, which runs from December 23 to December 30, allows people to purchase the memberships of Bilibili and Ele.me at 25 yuan, or $3.63, a month. That’s a 15 yuan discount from what users would have to pay were they to subscribe to the two services separately. The rationality behind the tie-up is an overlapping Generation Z user base. By 2017, about 82 percent of Bilibili’s users are 8 to 28 years old, according to a report by QuestMobile. Meanwhile, more than 60 percent of the users who order food online in China are under 24 years old.

China’s food delivery market is set to top 243 billion yuan, or $35 billion, by the end of 2018, according to iiMedia. By then, China will have 355 million users of food delivery apps — or about 40 percent of its national population. Five years ago, there were just over 100 million users for this market.

The boom has jacked up the price tags of market leaders Ele.me, which was valued at $9.5 billion in the Alibaba deal, and Tencent-backed Meituan Dianping, which had a spectacular initial public offering in Hong Kong in September.

Alibaba and Bilibili call their joint membership “Zhai E Kuai,” a wordplay on “be otaku together.” The Japanese word “otaku” originally means “someone else’s venerable home” and later took on a new life to describe someone who is so obsessed with a subject or hobby to the point of not leaving home. Bilibili’s core users are often stereotypically described as otakus of animes or video games, though certainly not all of them shun the outside world.

Aside from Bilibili, Alibaba has also been pally with Starbucks as the two began integrating their rewards systems.

Memberships similar to Amazon Prime have become an increasingly popular tactic for China’s tech giants to drive revenue growth. Alibaba, for instance, has lumped services of its portfolio companies under 88 Membership that spans ecommerce (Tmall), fresh produce (Tmall), food delivery (Ele.me), video streaming (Youku), music streaming (Xiami), movie tickets (Taopiaopiao) among others. Tencent has taken a different approach to membership with its King Card mobile internet plan, a partnership with China’s major telco that gives users unlimited data usage on apps in Tencent’s ecosystem — from social networks, video streaming to games.

Tencent-backed homework app jumps to $3B valuation after raising $300M

Academic exams are a big deal in China as they determine the kind of universities, high schools and elementary schools that students get into and to a degree, the future that awaits them.

Parents are thus willing to invest generously to help their children get ahead in school. One startup capitalizing on this need is Yuanfudao, a six-year-old startup that has attracted a line of big-name investors. The company announced this week that it has raised $300 million in a funding round led by existing investor Tencent, China’s largest social networking and gaming company.

Other participants from the round include Warburg Pincus, Matrix Partners China and IDG Capital . The fresh injection raised Yuanfudao’s valuation from around $1 billion at the time it pocketed $120 million in 2017 to exceed $3 billion.

China’s exam-oriented culture has given rise to a billion-dollar tutoring market. As affordable mobile internet becomes common, a lot of that teaching effort is happening online. A report by research firm iResearch shows that China’s online K-12 market will reach 44 billion yuan, or $6 billion, by the end of this year and will more than triple to 150 billion yuan by 2022.

Yuanfudao, which means “ape tutor” in Chinese, administers a suite of services including live courses, a database of exam problems and a popular homework help app. The latter scans homework problems and solves them instantly with the snap of a camera. The startup also operates a research institute for artificial intelligence, which could train its homework app to be smarter.

Yuanfudao claims to serve more than 200 million users, which include students and their parents who use the startup’s apps to check the learning progress of their kids.

Yuanfudao told TechCrunch that it derives the majority of its revenues from selling live courses. It plans to use the proceeds from the latest round to fund investments in research and development of AI as well as improve its apps’ user experience.

The startup is in a heated race to fight for Chinese students and parents. Other companies with similar homework help services include Zuoyebang, which is backed by Chinese search giant Baidu, Coatue Management, Sequoia Capital China and Goldman Sachs. Another one is Yiqizuoye, which counts Singapore sovereign fund Temasek as an investor. A wave of Chinese companies that started with a focus on adult education have also come into the K-12 fray, including New Oriental and 51Talk, which are both listed on the New York Stock Exchange.