Chinas 17 Education IPO Sees 2nd Day Price Pop

China-based education-tech play 17 Education & Technology saw its shares pop higher on its IPO’s second day of trading on Nasdaq Monday.

The IPO had priced at $10.50 for each ADS, the midpoint of the $9.50 to $11.50 indicative range.

On Friday, the first day of trading, shares had edged up to close at $10.57, while on Monday, the stock shot up 14.6 per cent to $12.11.

17EdTech, which provides online K-12 tutoring services in China, had raised $287.7 million in its sale of 27.4 million ADS, according to a company press release. New investor China Pinnacle Equity Management had indicated it would invest up to $80 million in the IPO, or up to 28 per cent of the offering, a post on the Nasdaq site said.

The offering also included an upsize option for another 4.11 million ADS, which, if exercised, would raise the gross proceeds to around $330.9 million, the press release said.

That’s a big jump from expectations in November that the IPO would raise around $100 million.

Education technology companies have seen a surge in interest after the COVID-19 pandemic spurred school closures globally, pushing students into online learning.

Based in Beijing, 17 Education provides data-driven teaching, learning, and assessment smart in-school classroom solutions to teachers, students, and parents across China’s more than 70,000 K-12 schools, or about 30 per cent of all K-12 schools in mainland China.

It also offers after-school tutoring courses in a large-class, dual-teacher format, covering major subject matters of China’s K-12 education.

The company intends to use the proceeds of its listing to improve the operation of its after-school tutoring services, enhance its product offerings, further invest in technology infrastructure, and finance its sales and marketing activities.

Founded in 2012, 17 Education is backed by Chinese venture capital firm Shunwei Capital, Temasek affiliate Esta Investments, Fluency Holding, H Capital Entities, CL Lion Investments, and Walden Investments Group, among others.

The company booked $151 million in revenue for the 12 months ended September 30, 2020.

Morgan Stanley, Goldman Sachs (Asia) and BofA Securities acted as joint bookrunners for the offering, while China Renaissance was a co-bookrunner, the statement said. Tiger Brokers acted as a co-manager.