CHINESE online education platform Yuanfudao is set to raise US$1.2 billion in a new funding round which will value it at about US$13 billion, according to sources with direct knowledge of the issue.

Yuanfudao’s existing investors, Tencent Holdings, Hillhouse Capital and Boyu Capital, will invest in this round, according to the sources. The three are vying for a leading role in the fundraising with Tencent being the frontrunner, one of them said.

The eight-year-old company has nearly doubled its valuation within six months. In March, Yuanfudao raised US$1 billion that valued it at US$7.8 billion.

The company is planning to raise more fresh capital to include new investors in the near term at a different valuation, said one of the sources.

Yuanfudao and Boyu declined to comment. Tencent and Hillhouse did not immediately respond to requests for comment.

Yuanfudao’s valuation surge comes as investors increase their bets on China’s online education sector, which saw a surge of interest after the coronavirus outbreak triggered a migration to online classes.

Startups targeting K-12 education have been particularly popular, which raised 12.5 billion yuan in the first half, more than 60 percent of the total amount raised by the sector, according to Chinese research firm IT Orange.

Online tutoring startup Zuoyebang in June raised US$750 million in a fresh funding round, led by investment firms FountainVest Partners and Tiger Global Management

Technology-driven education services provider GSX Techedu has seen its share price more than triple this year, while shares of TAL Education Group, which runs several online learning platforms, are up more than 50 percent.

Yuanfudao, which says it has accumulated 400 million users and has 11 teaching and curriculum development centers across China, also counts IDG Capital, Warburg Pincus and Matrix Partners China among its backers. (SD-Agencies)