# OneSmart International Education (2007 – 2024)

- URL: https://girisimcikafasi.com/en/startup-graveyard/onesmart/
- Sector: Education
- Country: China
- Total funding: $179.3 million
- Unicorn: yes, peak valuation $1.8 billion
- Cause of closure: Regulation and legal issues

## What did it do?

OneSmart was a Shanghai private education company offering premium one-to-one tutoring to children aged 3 to 18. It targeted families earning more than CNY 100,000 a year. At the end of 2017 it had 225 centres in 42 cities. It recorded USD 342 million of sales in the 12 months to November 2017 and listed on the New York Stock Exchange in March 2018.

## Why did it shut down?

The March 2018 listing priced at the bottom of its USD 11 to USD 13 range and raised USD 179.3 million. In July 2021 China severely restricted after-school tutoring. On 11 October 2021 more than 60 Shanghai campuses closed. On 12 October 2021 the company announced it was suspending all programmes and centres in China, and two independent directors resigned. It had shown CNY 2.7 billion of prepaid fees at the end of February 2021, and parents' refund demands became public. The share price fell to 40 cents on 12 October 2021. The company changed its name to Meta Data in April 2022 and entered official liquidation in the Cayman Islands in August 2024.

## The story

OneSmart sold to Chinese families ready to spend on their children's exam results. Founded in Shanghai in 2007, it grew on expensive one-to-one lessons. By the end of 2017 it had 225 centres in 42 cities and planned to add 30% a year. It listed in New York in March 2018, raising USD 179.3 million even though the price was set at the bottom of the range.

Three years later the state changed the rules. In July 2021 China imposed heavy restrictions on after-school tutoring, the field where OneSmart earned most of its income.

On 11 October 2021 more than 60 Shanghai campuses closed suddenly. The next day the company announced it was suspending all its programmes in China. Parents wanted refunds, but the system could not process them that week; according to Yicai, applications were taken by QR code. The shares fell to 40 cents, then to 24 cents before the market opened the next day.

The company renamed itself Meta Data in 2022 but could not survive. It entered official liquidation in the Cayman Islands in August 2024.

## Lessons

- If your business hangs on one regulator's decision, write an exit plan as well as a growth plan. Only three months passed between the July 2021 rules and the October 2021 closure.
- If you grow on prepaid fees, parents' money is your liability, not your capital. CNY 2.7 billion of prepayments became the hardest problem to resolve at closure.
- If you work in a sector the state cares about, track politics as closely as customer data. A rule change never shows up in your income statement before it hits.

## Sources

- [OneSmart's Shares Plunge After Edtech Firm Suspends Programs, Learning Centers in China](https://yicaiglobal.com/news/onesmart-shares-plunge-after-edtech-firm-suspends-programs-learning-centers-in-china)
- [Educator OneSmart Eyes North America, Europe for Expansion](https://www.caixinglobal.com/2018-03-29/educator-onesmart-eyes-north-america-europe-for-expansion-101228322.html)
- [OneSmart Education prices IPO at $11, the low end of the range](https://www.renaissancecapital.com/IPO-Center/News/55735/OneSmart-Education-prices-IPO-at-$11-the-low-end-of-the-range)
- [China's OneSmart Education sets terms for $196 million US IPO](https://renaissancecapital.com/IPO-Center/News/55544/Chinas-OneSmart-Education-sets-terms-for-$196-million-US-IPO)