Zuoyebang, China's largest online education startup in terms of user count, announced on Monday it had raised $1.6 billion in its series E-plus round of fundraising, as the country's online education entices investors amid the COVID-19 pandemic.

The new round attracted a slew of renowned investors, including Alibaba Group, Tiger Global, Softbank Vision Fund, Sequoia Capital China and FountainVest Partners. Taihecap continues to serve as its exclusive financial advisor.

"With the new fundraising, the company will invest big in education and technology and strengthen its core competitiveness. More efforts will also be made to expand our product portfolio and drive new business engines," said Hou Jianbin, founder and CEO of Zuoyebang.

As online education has entered a period of long-term fierce competition, Hou said the firm will focus on large-scale courses in the K12, or kindergarten to 12th grade, sector and will continue to offer high-quality educational resources and services.

Founded in 2015, Zuoyebang is an online after-school mentoring platform. Its core businesses currently include an online livestreaming course, an oral arithmetic calculation app and Paperang, a hardware product to search for answers to questions and help users take photos.

As of now, the accumulated registered users of Zuoyebang exceeds 800 million, with monthly-active users surpassing 170 million. With a registered userbase of 7.5 million, Paperang has ranked first in terms of shipments worldwide for four consecutive years and accounted for 60 percent of total market share.

Despite the general economic downturn due to COVID-19, online education has been one of the few growth areas in the country. The sector is expected to see more expansion, as the winter vacation may trigger fresh competition for student enrollment among the leading firms.

In autumn this year, Zuoyebang's paid users hit a record high of 10 million, and 2.2 million users take full-price classes. Among these, 70 percent are from third-to-fourth tier cities, up 10 percentage points year-on-year.

Starting this year, the education sector witnessed a change in investor attitude. They no longer prefer gradual investments and are pursuing long-term profits, industry insiders said.