The online education platform developer is reportedly lining up Tencent for a $1.2bn round that will value it at about $13bn.

China-based online education provider Yuanfudao is set to raise $1.2bn in funding from investors including internet group Tencent at a valuation of roughly $13bn, Reuters reported today.

Tencent will be joined by two other existing investors – hedge fund manager Hillhouse Capital and private equity firm Boyu Capital – two people with direct knowledge of the matter told Reuters.

Yuanfudao runs an artificial intelligence-equipped online platform that offers online classes, video tutoring and assistance with homework questions.

The company had 400 million registered users at the end of March this year but most online education platforms have experienced significant increases in user numbers during the Covid-19 pandemic and it is likely to have also expanded its user base.

The new funding will come after Yuanfudao secured $1bn in a March 2020 series G round valuing it at $7.8bn. The round was co-led by Tencent and Hillhouse Capital and included Boyu Capital and venture capital group IDG Capital.

Tencent had already led a $300m round for the company in late 2018 that also featured IDG Capital, Warburg Pincus and Matrix Partners China, following $120m from Tencent and Warburg Pincus the previous year.

Yuanfudao raised $40m from Tencent to close a series D round also backed by IDG Capital, Matrix Partners China, CMC Capital Partners and New Horizon Capital at $100m in 2016.

The company had previously received a total of $23.6m from investors including IDG Capital and Matrix Partners China across three rounds in 2012, 2013 and 2014.