What’s new: The founder of failed Chinese tutoring company can’t even give it away.
Zhang Kailei’s eight-year-old Xueba100.com ran out of money and ceased most operations Jan. 1 after failing to raise funds from investors. That left thousands of employees jobless and due back wages and tens of thousands of students and parents seeking refunds of prepaid tuition.
In an open letter posted on his social media account, Zhang asked the company’s more than 100 franchisees to look for other tutoring operators to take over their schools to cut their losses. He also offered to hand over the company as long as an acquirer could accept some of its students.
The background: China’s online education sector has boomed in recent years, seizing on a culture that places strong emphasis on education, especially for the young. The rapid development of online technologies helped companies to get up and running quickly and attract sizable student bodies. But the easy entry resulted in stiff competition that left most of the newer arrivals losing money.
Xueba100.com’s collapse came just two months after another private tutoring company, Youwin Education, similarly crumbled, prompting hundreds of parents to turn up at the company’s Beijing headquarters to demand their money back.
Youwin founder Chen Hao made overtures to a number of billionaires including Jack Ma and Tencent Holdings founder Ma Huateng, offering to give away his stake in the company, but he hasn’t found any takers.
Xueba100.com still has a quiz database and a class system, which would be offered free if any top tutoring companies could take over, Zhang said. Any the proceeds from a sale would be used to pay staff salaries and class fees to teachers.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com).
Related: Online Tutor Xueba100’s Executives Go Truant as Company Collapses
