"The resumption of offline stores needs to wait for the notification from the superior department. It is expected that the normal operation of offline stores can be realized around the end of June."
This is the resumption notice issued by the music training institution Xiaoyinka on June 6.
However, when the time came to the end of June, Xiaoyinka did not resume work as planned, but instead encountered financial difficulties, store closures, and business stagnation.
In addition, another well-known sparring organization "VIP sparring" acquired by Xiaoyinka in April this year has also experienced suspension of classes and arrears of wages.
Founder admits funding difficulties, teaching sites empty
Xiaoyinka was established in 2015, mainly engaged in music tutoring for children aged 4-12, including 1-to-1 instrumental vocal training, music general knowledge and interest literacy courses.
The company completed the A round of tens of millions of RMB financing in October 2020.
On June 1 this year, after Shanghai fully resumed work and production, Xiaoyin Cafe, like other education and training institutions, did not resume offline teaching activities in time.
On June 6, Xiaoyinka issued a notice saying that it will comply with the epidemic prevention requirements, and it is expected that the normal operation of offline stores will be realized around the end of June.
However, around June 10, there were rumors on the Internet that Xiaoyinca’s capital chain was tight, and it could not continue to operate, and would give parents refunds and other rumors.
On June 12, Xiaoyinka clarified that the company is still operating and will actively resume the normal operation of offline stores.
But on June 13, Xiaoyinka founder Li Ai issued an open letter acknowledging that under the influence of multiple factors, Xiaoyinka did encounter financial difficulties.
Li Ai said that he is currently actively seeking time for financing, asking for help, and doing everything possible to raise funds.
But since then, the business situation of Xiaoyinka has not improved.
According to a number of parents, at present, the offline teaching point of Xiaoyin Cafe has not been opened, so classes cannot be taught as planned, and there is no way to apply for a refund, and neither the company nor its employees can be contacted.
Recently, reporters from Securities Times·e Company have also visited many teaching sites of Xiaoyinka in Shanghai. At present, these teaching sites are basically closed.
The 7th floor of Shanghai Real Estate Building in Xuhui District is a teaching point of Xiaoyin Cafe.
The property staff told reporters that Xiaoyin Cafe is currently unmanned. As a teaching site, there are usually only people here during class, but recently, I haven't seen the company's office staff for a long time.
A teaching site of Xiaoyin Cafe in World Plaza in Pudong New Area is also locked.
Through the door, you can see that most of the green plants in the office have died, the ground is covered with dust, and the landlord's prompt "please contact the landlord when opening the door" is posted on the door.
Among the many teaching sites visited by the reporter, the only one with reception staff was the teaching site located in Jing'an Darongcheng shopping mall.
When the reporter visited on June 25, the door of the teaching site was closed and there were no office staff, but a notice was posted at the door, prompting parents to register at another designated location.
At the designated registration point, a volunteer in a red vest took out a form and guided parents to register.
The registration contents include contact information, student names, subjects studied, appeals, etc.
The volunteer said that he was not a staff member of Xiaoyinka Company, nor a property staff member, but only an "epidemic prevention volunteer".
The reporter saw a number of parents who came to refund the fee during the scene, and more than a dozen parents have been registered on the form. The largest parent paid more than 50,000 yuan in tuition fees, and their appeals were all "refunds".
The above-mentioned "volunteers" told reporters that there is no other way to contact the company except to assist in registration.
M&A VIP sparring in April this year
Judging from a series of actions this year, Xiaoyinka's crisis seems a bit sudden.
Just in April this year, Xiaoyinka also spent a lot of money to complete the acquisition of another music sparring platform "VIP sparring".
According to the data, VIP sparring is affiliated to Shanghai Miaoke Information Technology Co., Ltd., which mainly provides one-to-one online instrument sparring services for 6-16-year-old piano children.
According to the information from the venture capital information platform Xinya, VIP Peilian has completed at least 4 rounds of financing before.
Among them, the B round investors include Tencent Investment, Jinshajiang Venture Capital, Lanxin Asia and so on.
In November 2018, VIP Peilian completed a $150 million Series C financing led by Tiger Global Fund.
Information released on the company’s official website shows that as early as March 2020, the platform’s total monthly revenue exceeded 200 million yuan.
The company's highest valuation is also over $1 billion.
In addition, the platform once hired pianist Lang Lang as its "sparring ambassador".
As of now, Lang Lang's image still appears in a prominent position on the company's official website.
Industry and commerce information shows that on June 13 this year, Shanghai Miaoke Information Technology Co., Ltd. changed its shareholding, and Shanghai Yiqilai Art Troupe Co., Ltd. became the sole shareholder of the company, holding 100% of the shares.
This means that Xiaoyinka and VIP Peilian have actually become two platforms under the same company.
After Xiaoyin Cafe's business crisis, the situation of VIP sparring is also not optimistic.
A number of parents who purchased the VIP sparring platform course told reporters that the VIP sparring course can still be carried out normally for a period of time after the crisis of Xiaoyinka.
Until June 25, they were also temporarily notified that the course was canceled, and they were unable to attend the class at present, and they could not contact the company for refunds.
There are also a number of Internet "big Vs" on Weibo who said that without receiving any notification from the training institution before, when it was time for class, there was no teacher access and the class could not continue.
"We started taking classes in VIP sparring last year. Yesterday, the teacher told us that the platform did not pay them wages, and the class could not continue." The student's parent, Chen Chen (pseudonym), told reporters.
"In February, the company said that there will be a promotion for the 7th anniversary of the opening of the school, and there will be discounts for renewing courses. At that time, we only had a dozen or so courses left, so we will continue the course." Chen Chen introduced that the platform provides two course renewal packages, and the first package is for payment. 13,888 yuan, a total of 184 lessons can be obtained, with an average unit price of 75 yuan per lesson; package 2 is a payment of 11,000 yuan, and a total of 124 lessons can be obtained, with an average unit price of 88 yuan per lesson.
Chen Chen finally chose the course of Package 2, which is taught 4 times a week, and is valid until July 2023. There are still many courses that have not yet been taken.
In fact, before this, the relevant departments have issued documents many times, requiring training institutions to charge tuition fees for no more than three months at a time.
In early March this year, the Ministry of Education and other three departments issued an announcement again that non-discipline off-campus training institutions must all pre-charge fees into the institution's special charging account, and shall not be charged at one time or in the form of recharge, sub-card and other forms of disguised collection for a time span of more than 3 months or 60 class hours.
Institution teachers can't contact the company
Up to now, the official website of Xiaoyinka and VIP Peilian can be opened normally.
However, regardless of the official phone call or the additional customer service consultation phone provided by the company, they are all unanswered or turned off.
On June 26, the reporter tried to book a course on June 27 on the VIP sparring platform.
Although the appointment can be made normally, the message "The teacher has asked for leave" is displayed at the agreed class time.
"The platform originally paid wages on the 10th of each month, but it was later notified that it was postponed to the 25th. But on the 25th, we have not received any news, including human customer service, robots, and no one answered the company's phone calls, so I put this Two days of classes have been cancelled." Sun Fang (pseudonym), a VIP sparring teacher in Liaoning, told reporters.
Sun Fang said that she has been a full-time teacher on the VIP sparring platform for two years. Usually, she mainly teaches students online, and only communicates with the company online.
"The teaching system has not been closed yet, and students can still be taught, but no one responds even after calling the company. So far, the platform has owed me 2 months of salary. There are thousands of teachers who are in arrears." Sun Fang said.
The conversations with platform employees sent by many parents to reporters also showed that both Xiaoyinka and VIP sparring have been in arrears of wages.
In response to the recent series of situations, the VIP sparring platform has not yet made any public statements.
The reporter has made multiple calls to the company recently, but they have not been able to get through.
Xiaoyinka has previously publicly stated that since the epidemic, the company has been busy solving financial problems, and the company has never declared bankruptcy. It is hoped that parents can give some time and opportunities to continue serving students and suspend refunds.
Regarding the platform teachers and course arrangements, Xiaoyinka said that it will call on teachers to participate in the Xiaoyinka rescue plan, and sincerely hope that teachers will resume teaching as soon as possible on the premise of accepting the installment plan to ensure the progress of students' music learning. The specific plan will be Announced on June 17.
But so far, it has not announced the relevant plans.
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