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Winner's Key, a Gobi portfolio company, completes a multi-million A+ round

Venture capital firm Gobi Partners recently funded portfolio company Winner's Key for their Series A+ round, which was worth tens of millions of RMB. Other investors in the round included S&G Investment, Gaosi Education, and Baihong Ruier. Zhou Xingtian, CEO of the company, said that the round will be used for developing and optimizing their online tutoring and childcare platform "Tolele", upgrading their ACT self-learning system, and for the construction of a standardized management process for their business. 

Winner's Key is a provider of weekly afterschool tutoring sessions and childcare services for primary school students from wealthy families that are in grades one through five. Their services cover homework supervision, teaching good habits, teaching emotional intelligence (EQ), and planning the child's physical and mental growth. Additionally, the company's Tolele platform helps to collect and analyze data on their enrolled students, which can be used to formulate the aforementioned plans for the child's growth phases. In the future, Winner's Key hopes to be collaborating with other institutions on this initiative. 

In the past year, China's new policy of reducing the educational burden of primary and secondary school students has given rise to the launch of new businesses in the tutoring and childcare industries. In fact, the policy has created an urgent need for parents to organize afterschool tutoring sessions and childcare for their children; millennial parents specifically, due to their usually double-income status, put a priority on planning out the holistic growth of their children. However, the traditional method of "table-side" (side-by-side) tutoring and traditional childcare leaves no room for counselling on other soft skills, thereby creating opportunities for businesses in that field. Currently, the market penetration of these types of services is really low, standing at only 10%. 

Conversely, evening tuition sessions itself is a business that is difficult to scale. This is due to its heavy reliance on teachers, who face the problem of being underutilized for their skills during the day or on the weekend. Additionally, the service itself is hard to standardize and there is no effective way to quantify the impact it has on students and parents. As a result, there is no one company at present that can lead this segment of the education industry. 

Winner's Key, however, has found the solution, which can be summarized into three aspects: 

1) Emphasis on the education portion of the service, and improving the renewal rate. 

Parents want to focus more on childcare for younger children, while tutoring is more of a concern for their older children. Therefore, it's important to plan a child's needs for each stage of their development into adults. 

Winner's Key approaches this concern by separating the "management" and "teaching" of a child. Teachers working at their centers are not only responsible for caring for a child, but must also ensure that each aspect of the service is handled well. By contrast, regular online tutoring platforms hire college students or graduates with a background in education as tutors. Winner's Key also provides homework supervision through its proprietary system. The company offers STEAM courses, thematic learning and summer camps that not only solve childcare issues that parents may have, but also helps them to see changes in their child's learning habits, personality development, and abilities. 

Zhou says that the company has invested time into research and development (R&D) and money in operating costs in order to separate the "management" and "teaching" of a child. They currently have a customer retention rate of 90%, and since they allow group tuition, a tutor's time is more effectively utilized. 

2) Develop online management tools to standardize the process. 

Winner's Key has a proprietary management platform named "Tolele", which handles back-end operations such as scheduling, finance, personnel management, monitoring of tuition sessions, offline data management of operations, as well as the provision of student report cards to parents. The platform also gives daily homework guidelines, a Cloud service that acts as an assistant in answering and marking assignments, a daily agenda for tutors, tracking of a student's development, and etc. 

Zhou said that once the system is fully developed, it will be deployed across their centers and eventually will be accessible to other institutions in the future. 

3) A B2B and B2C combined business model to improve performance. 

Winner's Key business model is divided into time periods to ensure teaching efficiency and service quality: a mid-week B2C model, providing high-end tuition sessions; and a weekend B2B model, providing high-end on-location support, and classes with popular teachers, which improves the utilization of classrooms at their centers, and broadens their services. 

To gain customers, Winner's Key mainly relies on the enrolment of primary school students and word-of-mouth. Simultaneously, htey use marketing tools, such as providing bus transportation to and from their centers to school-goers and uniforms. 

Winner's Key Founder Zhou Xingtian is an experienced entrepreneur. In 2015, after five years in the gaming industry and three years in the education and training industries, he founded 020 tutoring platform Yusi Education. COO Zhang Jun has eight years of experience in the education and training industries. He was previously the principal of Jingrui Huangpu Education Center, and was also a regional director of Jinrui Education in Shanghai. Winner's Key's other principal team members are mainly from the education industry or the advertising industry, where they focused on marketing products and services to middle and high-income households. 

The company currently has 10 centers in Shanghai, which are mostly located near upper-tier primary schools. On average, each center is more than 200 square meters in size, and has around 80 students and eight teachers; each location has a profit margin of 15%. In 2018, Winner's Key achieved revenue of RMB17 M, and in 2019, the company plans to be operating around 20 - 25 centers and is targeting a revenue of RMB40 - 45 M. 

Participating investor Gaosi Education has expressed optimism about Winner's Key's presence in the B2B market. Their service can help Gaosi Education to improve the utilization of its own classrooms. In return, Gasoi will be opening up some of its educational and research resources to Winner's Key, so they can jointly provide a system and content package for other afterschool tutoring service providers.