Liyou Education’s logo
Text | Pencil Road reporter Xiao Qingning
There is "1-on-1 for top students" in the front, and "1-on-1 for top academics" at the back.
On October 24, a notice was posted in front of Liyou Education Company, officially announcing the company’s suspension of operations and classes.
Liyou Education explained in the notice that the reason for the company's operating problems was that due to a civil lawsuit with Shanghai Taomi Network Technology Co., Ltd., the company's account was judicially frozen for 10 million yuan, resulting in a rupture in the company's cash flow.
After the news came out, parents, teachers, and suppliers of students involved in Liyou Education were in an uproar.
The number of Liyou Education students is roughly 4,000-6,000, and its locations are almost all over the country. Parents have lost as much as 30,000 to 50,000 yuan, and as little as 10,000 yuan. Because it involves the issue of education loans and there are too many students, the specific amount cannot be calculated. Liyou Education is divided into two campuses, the Shanghai headquarters and the Wuhan branch. The total teachers in Shanghai are owed more than 2 million yuan in salary, and the full-time teachers in the Wuhan branch are owed more than 1.7 million yuan in salary. Many teachers have applied for arbitration.
On the day the news was sent out, the advertising supplier of Liyou Education came to the door, but the building was already empty. They come from Hangzhou, Beijing, Jinan and other places, and each of them is owed money ranging from hundreds of thousands to millions.
The chaos in the 1-to-1 online education industry, education loans… these sensitive words appeared in the venture capital circle for the second time in October this year.
Note: The content of this article mainly comes from interviews with Pencil Road reporters and public information on the Internet. The arguments are inevitably biased and are not deliberately misleading.
Sudden school suspension notice
On October 24, Shanghai Liyou Education Technology Co., Ltd. (hereinafter referred to as "Liyou Education") posted a notice on the company's glass door about the company's "suspension of classes and operations." The main message of the announcement is that due to the civil lawsuit brought by Shanghai Taomi Network Technology Co., Ltd., Liyou Education’s company account has been judicially frozen for nearly 10 million yuan, resulting in a rupture in the company’s cash flow. It has now been decided that the company will suspend operations from October 24, and all students will suspend classes. . The announcement also showed that the company is seeking new capital injections and filing with relevant government departments.
Notice posted at the gate of Liyou Education
At the same time, a notice was posted on the company's door stating that wages were delayed and that the property's rent, water and electricity bills, property fees and other related expenses were in arrears. The property management stated in the notice that it would terminate the lease relationship with the company and take back the leased house with immediate effect.
Notice posted on the property that the house has been repossessed
According to multiple sources, Liyou Education has been in arrears with wages to some employees for up to three months. The company's office computers are leased items and have all been recovered. Except for some part-time teachers, the institution has suspended classes across the board. On October 25, some parents and faculty members had tried to safeguard their rights and went to arbitration.
Pencil Road learned about this incident through multiple sources and tried to restore the incident itself as much as possible.
Zhang Le (pseudonym), a full-time teacher at Liyou Education Wuhan Branch, told Pencil Road about the incident. This teacher had been with Liyou for more than a year and was owed about 24,000 yuan in salary. "Currently, according to our internal statistics of teachers, there are more than 70 employees in Wuhan, with more than 1.7 million yuan in arrears in wages. Teachers in Shanghai are owed more than 2 million yuan. Teachers who are owed wages have a rights protection group, and the number of members in the group has been The number reached 176. What is certain is that both parties have initiated arbitration. With three months of salary arrears, most full-time teachers were forced to suspend classes or even resign, and students were unable to attend classes." In addition, he said, "Any executive and us directly connect".
Pencil Road obtained a screenshot of an announcement in the Liyou class teacher group. The announcement informed the teachers in the group that Liyou Education executives informed the institution’s faculty and staff through middle-level leaders that the final results would be given this Sunday or at the end of this month, and that the company may be acquired and merged. Or declare bankruptcy.
In this regard, a Liyou Education teacher said that the company may be acquired by Excellence Education, but the specific situation is not clear. Public information shows that Excellent Education Group started in June 2000. It is an after-school tutoring and training institution for primary and secondary schools. It mainly provides quality education in subjects to primary and secondary school students aged 3-19. The institution has opened more than 100 campuses, and its courses cover tutoring. classes, full-time high school seniors, full-time junior high school seniors, etc., including 1-to-1 online courses.
Excellent education course content covers 1 to 1
Excellence Education received US$10 million in financing from Sequoia Capital in December 2010. On June 29, 2018, the company submitted its listing application to the Hong Kong stock market. Excellence Education’s business strategy in the prospectus states: We plan to continue to maintain and consolidate our leading position in China’s K12 extracurricular education market.
Excellent Education Prospectus
From the group announcement, we can see that Liyou Education has 400-500 part-time teachers, 70-80 full-time teachers, 300-400 full-time employees, 5-8 senior leaders, and 100-200 people in the sales department… … Regarding the recruitment requirements of Liyou Education, a teacher said: "Full-time teachers need written examinations, interviews, and a series of certificates including teacher qualification certificates. Part-time teachers are relatively easy, and some part-time teachers do not have teacher qualification certificates." The number of students in Liyou Education is 4,000 to 6,000. Because it is an online education model, the students cover almost all provinces and cities.
Pencil Road contacted Xiao Min (pseudonym), a full-time teacher in charge of junior high school mathematics at Liyou Education. She said that she joined the company in mid-January and had worked at Liyou Education for ten months. "The salary here is quite high. If you take 150 classes a month, you can earn about 7,000 to 8,000 yuan, and if you take 180 classes, your income can reach 10,000 yuan." "One hour is calculated as 1.5 class hours, every night from Monday to Friday. Classes last two hours, and classes last for about ten hours on Saturdays and Sundays. Because we are an off-campus training institution, we have the most classes on holidays." Talking about the institution's corporate payment situation, he said, "The company's previous performance has been pretty good. Full-time teachers' class fees are paid every other month. As usual, August class fees are paid in October, but it has been delayed until now. No one at the top can be contacted.”
On the eve of the institution’s announcement to cease operations, did parents request a refund? Xiao Min said: "After the incident in the company, there was no official statement. In all cases, teachers, head teachers, and teaching assistants of the institution notified parents. Some head teachers were worried that parents would cause trouble and they would not get money, so they would deliberately hide it from parents and say, 'We It’s not broken yet, you can continue to go to class,’ and then morally kidnapped the teacher to go to class. Because of internal strife, it was very difficult to defend rights at the beginning.” Regarding rights protection, Xiao Min said, "Employees in Shanghai and Wuhan have gone to the labor bureau, arbitration bureau, and petitions. Parents have spontaneously established many rights protection groups. They have also called the police and filed lawsuits. They have done everything they need to do. … But it’s hard to defend your rights.”
On October 25, all teachers at Liyou Education issued a notice to parents, officially announcing to parents that Liyou Education had officially ceased operations, and that the institution had been involved in financial disputes with Taomi since June 2018. It mentioned that the company’s original legal person and CEO Ye Qianqian disappeared and never came forward to issue any statement. There was no crisis public relations response on the agency’s side. On October 23, Liyou’s operations were paralyzed. The notice also includes the handling of parent tuition installment loans. On October 24, Fusheng Fenyun has confirmed that it will stop installment payments to Liyou students. Baidu Youqianhua is also the installment business partner of Liyou Education. At that time, Baidu Youqianhua had not yet been confirmed.
All faculty and staff of Liyou Education notified parents of the suspension of operations and classes
Zhang Le also mentioned, “Even though operations and classes have been suspended, the institution has not shut down the system. The technical department has been disbanded, and parents’ classes are still being deducted as usual.” Classes are still being deducted as usual, and Baidu installments must be repaid as usual. The chat record between the parent and the teacher reveals the helplessness…
Parents’ chat history
Another parent said that in July 2017, he bought a course from Liyou Education for the first time. At that time, he bought 270 class hours at a cost of 20,364 yuan, with a down payment of 3,500 yuan, and the rest was spent in 12 Baidu installments. Then at the end of August 2018, he renewed the course for 240 hours and paid a one-time payment of 18,400 yuan. I have taken 108 class hours and still owe 432 class hours.
Parents’ chat history
Parents' repayment bill
So what are the fees for students? Zhang Le said: "The teaching assistants are responsible for recruiting students. The company's tuition fees are set by the teaching assistants at the Shanghai headquarters based on the company's operations in each quarter. The fees may be different in different quarters. We are also prohibited from discussing the parents' payment status."
Another teacher Yang Jia (pseudonym) said that Liyou Education’s class fee is 180 yuan/hour, and at least 60 classes are purchased each time, with a total cost of 10,800 yuan. She said that the parent of one of her students bought a total of 222 hours of regular classes at a cost of 229.95 million yuan, and each class was only 103 yuan. "Basically, the business was operating at a loss," she said. Regarding the discrepancy between the unit price of class fees and previous statements, she also said: "There are discounts for buying classes in different periods, and sometimes free classes are given. A class is 40 minutes. 40 minutes is 100 yuan, and an hour is about 150 yuan." . "This parent has taken a total of 100 classes. The tuition was paid in installments. He has repaid 5 installments. After that, the deductions will stop and the loan can be refunded."
Parents' tuition payment contract
Parents' tuition payment contract
Parents make monthly repayments to Baidu Youqianhua on time
Pencil Road saw a screenshot of an installment loan refund from a parent. The text message came from Baidu Youqianhua. The content was roughly: Baidu Youqianhua has learned about the relevant situation of Shanghai Liyou and will handle the loan refund before 20:00 on October 29. business. Parents who pay in installments don’t lose much.
Baidu has money to spend and terminates repayments to parents
Parent Zhang Ming (pseudonym) reported part of the situation to Pencil Road. "Parents currently have several statistical tables. One has more than 900 people, and the other has more than 500 people. Some people say that the per capita quota is 20,000, but I think it is about the same. I have about 10,000 left, and there are many people with 30,000 to 50,000." He He also said that one parent is a lawyer himself and is currently looking for relevant materials. There are also parents who introduce lawyers from their own companies, charging 3,000 to 5,000 yuan per person. In addition, attached is a notice issued by the staff of the institution to parents, which covers the suspension of classes for students, as well as the measures taken by Liyou Education, Fusheng Fenqi, and Baidu Youqianhua to stop the operation of the institution.
Parents’ chat history
Parents begin to seek legal solutions
Notice issued by Liyou Education teachers to parents
On October 26, senior management of Liyou Organization spoke out in the general groups in Shanghai and Wuhan. A member of the group informed everyone about the salary list. He said that among the 143 people who went to Hongqiao Road, 22 went with an arbitration agreement and had been accepted by the arbitration tribunal, so these 22 people were not included in the salary list. It is understood that the 22 people who went to arbitration were the first batch of employees to apply for arbitration. As for the Peggy referred to in the screenshot, according to an employee in Wuhan, "At that time, Liyou asked some employees in Shanghai to sign a contract with Peggy. Peggy was from another company. There seemed to be a debt dispute between the companies because they were not in Shanghai. The specific situation not very clear."
Chat content of Riyou Advertising Supplier
Chat content of Riyou Advertising Supplier
Chat content of Riyou Advertising Supplier
Pencil Road saw a message on Weibo: "No leaders or people from the Minhang District Government came forward to say anything. When I bought the course, they said that the district party committee secretary had visited. If this happened, the legal persons are getting away with it." The government also did not come forward to appease.”
Message from parents
Public information shows that on May 25, 2018, Director Xu of the Science and Technology Committee of Minhang District, Shanghai, and other personnel went to visit Liyou Education.
Director Xu of the Minhang District Science and Technology Commission and his delegation took a group photo while visiting the AI intelligent system of Liyou Education
Liyou Education's part-time teachers are only owed until October because their salaries are paid once a month, but Liyou's suppliers are not so "lucky".
Song Xiaojie (pseudonym), an advertising supplier of Liyou Education in Hangzhou, reported the relevant situation to Pencil Road. He said that he had cooperated with Liyou for three months and was owed 270,000 in advertising fees. The specific cooperation process is that the advertiser provides advertising space, Liyou places the advertisement, and then pays the advertising fee to the supplier. In the Liyou channel rights protection group, other suppliers who are owed money are talking about the process of cooperation with Liyou and the arrears…
The specific number of suppliers that cooperate with Liyou Education is temporarily unavailable, but it is certain that the suppliers who are owed money are not just the 16 people in the group. According to statistics, the total amount owed to suppliers in the group is between 3 million and 5 million. From the screenshot, we can see that a certain channel supplier in Beijing is owed 1.28 million, and several advertising companies in Hangzhou are owed 1.28 million. The amounts owed range from 450,000, 310,000, 200,000, and 270,000 respectively. The suppliers are also located in Shanghai and Jinan…
The chat history of Liyou Education Supplier in the rights protection group
The chat history of Liyou Education Supplier in the rights protection group
The chat history of Liyou Education Supplier in the rights protection group
Members of the group said that on October 24, the suppliers went to the Shanghai headquarters. There was a large channel supplier present at the scene who was doing Cpa advertising and was owed about 5 million. He said: "When we went there on the 24th, the building was already empty, and all the suppliers had passed by. We couldn't find anyone in charge."
Suppliers once went to Liyou's office, but the building was already empty.
As can be seen from the screenshots, there was a problem with the payments between some suppliers and Liyou Education within the first three months.
On October 28, the channel dealers in the Liyou channel rights protection group informed everyone that there was new progress in the case.
Some suppliers said that the lawsuit has made new progress.
The outside world has no way of knowing the specific content of the cases between Liyou Education and Taomi Technology.
Pencil Road got a screenshot from the Liyou Education Rights Protection Group. This anonymous person claimed that the case between Taomi Technology and Liyou Education was taken over by the Xuhui District Department. The case happened to be assigned to his friend's department, so he asked him some relevant questions. Condition. The voice translation of the WeChat message roughly states that the litigation case between Taomi Technology and Liyou Education is not an economic case, but only a civil litigation case, so the public security and economic investigation will not take certain measures against Liyou. Previously, Liyou said that funds were frozen due to the lawsuit. Now that Taomi has withdrawn the lawsuit, it can sue Liyou and recover wages. Regarding such news, a full-time teacher said: "I always feel that this is all a trap. Even if the frozen funds of 10 million are unblocked, the salary of the employees may not be enough, let alone the compensation to the parents."
The content of the screenshot is roughly that the Taomi.com lawsuit may be judged as a civil lawsuit, and the deposits in Liyou Bank will be unfrozen.
Funding problems have been foreshadowed for a long time
Liyou 1 to 1 started in September 2014. It is an online 1 to 1 learning platform with famous teachers focusing on high school online, providing teaching to junior high schools and high school students.
From the official website of Liyou Education, we can see that the institutional course subjects are divided into mathematics, English, Chinese, physics and chemistry. The teachers are divided according to their levels. There are 5 levels in total, namely C level, B level, B+ level, A level, S-level and C-level are internship periods, and then go up step by step. The higher the level, the more class fees and the basic salary will increase.
Screenshot of the official website of Liyou Education, which divides teachers into five levels
So, how can you upgrade to a high-level teacher? There are two main aspects of teacher promotion. One is the observation of lesson consumption, and the other is parent ratings. The institution will regularly select a certain proportion of parents and ask them to fill in a form about the teacher's class. This form involves various aspects, such as how the students' grades are, or whether the teacher's feedback is timely. In addition, parents will use the parent software. Synchronous monitoring is possible. The institution will ask the parent if he/she monitors synchronously regularly. What suggestions does it have for the teacher? There will be a scoring situation.
Teacher Zhang Le said: "For most people, it is very difficult to maintain B or B+. It is very difficult for S."
Liyou Education has a backend for teachers, Teacher Help, and parents’ feedback on the courses. Teachers can see it in the backend, and parents usually communicate with teachers in the study group.