Although the company's business is growing rapidly and its traffic base is increasing day by day, there is still no very effective monetization method to monetize traffic, and it can only rely on the industry's common advertising business to create revenue.
It can be said that whether it is a platform or an individual, as long as it controls a certain amount of traffic, it can be monetized through this method.
This is also a lifeline that many platforms rely on for survival, and it is also the most basic supply and demand relationship in the entire traffic market.
The successful example of [Papi Jiang] is to open up the channels for advertising monetization in the Internet celebrity industry. With the first precedent, there will naturally be the second and third...
After all, this case has opened up the entire industry's thinking, and the market's reaction is always belated. Before this, most funders had not noticed the huge potential hidden behind the label "Internet celebrity".
swipe.
Its potential is not inferior to that of so-called "stars", especially compared to "stars", the cost-effectiveness of using "Internet celebrities" is extremely high, and it can exchange for more considerable returns with less investment.
Even brand owners would not choose to struggle with money. On the contrary, people who are increasingly rich are often more sensitive to money.
I won’t waste every dollar I have, but I won’t be stingy about investing in the right things.
This may also be the reason why once the Matthew Effect is formed, it is difficult to reverse. After all, once the snowball starts rolling, a large amount of resources will inevitably be controlled by a few people before major variables occur.
Even the intervention of major variables will only cause a major reshuffle of the industry, which is essentially difficult to change.
Getting back to the subject, Yang Luyu is naturally not a vegetarian. With a good card like [Papi Jiang] in his hand, he naturally wants to make the best use of it to maximize benefits.
As the platform party, Yang Luyu took the lead in establishing a third-party platform attached to the platform to specifically serve brand sponsors and creators. The platform will connect the two parties to fully protect the interests of both parties, thereby promoting mutually beneficial cooperation between the two parties.
The platform party can also collect service fees from it as a matter of course. In this way, after the successful formation of a virtuous cycle system in which all three parties are mutually beneficial, it can also feed back the ecology of the platform itself.
At the same time, it can also tie creators and platforms into a boat of common interests, which can be said to serve multiple purposes.
In fact, such a revenue sharing system has ever-changing forms on any platform. The names may be different, but the essence is completely the same.
In the final analysis, in order to consolidate the basic base of content, the platform distributes the platform income to the creators, and even the users can benefit from this, and they can enjoy themselves by "picking up a handful of wool".
But the wool ultimately comes from the sheep. Once a stable platform ecosystem is formed, the platform will naturally find a way to recoup this expenditure with profits.
Therefore, although Yang Luyu has successfully created this system, in order to support platform creators and encourage their enthusiasm, the platform currently does not charge any service fees.
Yang Luyu originally thought that his skills were good enough, but he didn't expect that Toutiao would be even more ruthless than him. He directly used his own pocket to use a total of 1 billion in cash to subsidize creators, making him the king of the industry.
It is precisely for this reason that Wenxue Network, which had already entered a healthy development stage, had to start a financing plan again and seek external funds to fight this money-burning war.
The Wenxue Network alone can no longer solve such a crisis, and if you choose to sit back and do nothing, it is equivalent to allowing your opponent to develop wantonly. If you are not careful, you can easily fall into a situation of chronic death.
In particular, Ame in the hands of Toutiao is still a direct competitor that is highly similar to Douyin. The moral high ground it occupies alone is not enough to turn things around.
After all, neither creators nor users are as confident as platforms to engage in long-term strategies such as catching big fish. They can only engage in guerrilla warfare and go wherever there is benefit.
This also destined users to be "short-sighted". The word "short-sighted" naturally does not have any meaning of praise or criticism here, but is simply an objective description.
After all, the so-called long-term vision of the platform is only to recover profits more intensively in the future. There is no essential difference between the two.
Therefore, after the Toutiao Department has spent real money and sincerity, it will naturally not work if Wenxue Network wants to restrain users only by "moral kidnapping".
From the perspective of cost considerations, "moral kidnapping" is undoubtedly a low-cost, high-income measure. Now that it is no longer feasible, it is natural to increase investment.
After several days of fermentation, investment institutions that are interested in Wenxue Network’s financing have naturally shown their sincerity.
So today, a group of people gathered together to prepare for formal consultations on this matter. This open and honest choice is undoubtedly the option to maximize interests for Yang Luyu.
Although he is asking for help from others, in the current short video industry, he is also a person with scarce chips. In a situation where there are more wolves and less meat, he is also a rare commodity.
Especially with Zhou Dongsheng as a strategic investor, this is his greatest psychological support.
At this time, the conference room of Wenxue Network was slightly crowded. The heads of several major investment institutions were sitting here. One of them looked at the battle in front of him and said slightly dissatisfied.
"Mr. Yang has used a good trick to bring us all together. Is it because he wants to reap the benefits? Then Mr. Yang also thinks that we are too simple, right?"
Faced with this person's first attack, Yang Luyu said calmly: "Mr. Zhang's words are serious. This is just a way to show sincerity to investors. Our attitude towards investors is absolutely equal."
"In that case, why haven't you started yet?" After Mr. Zhang expressed his attitude, he stopped and asked.
"Wait a minute, we're already on the way, we'll be there soon!" Yang Luyu said with a smile.
"Since we are treating everyone equally, why should we wait... Could it be that the other party is more important than us?" As soon as these words came out, Mr. Zhang became unhappy on the spot and almost got angry on the spot.
Before Yang Luyu could reply, a group of people opened the door to the conference room and walked in, chatting and laughing.
Mr. Zhang glanced at the young man in the lead and was about to take advantage of the opportunity, but after he glanced at the person standing next to him, he decisively swallowed back the words that had reached his throat, as if nothing had happened before.
He even managed a bright smile and took the initiative to chat: "I didn't expect you, Mr. Li, to be here too? Didn't Tenda strategically give up on its deployment on the short video track?"
As soon as these words came out, it can be said that there is no one to mention. After all, the short video track is indeed a major oversight of Tenda's strategy. Otherwise, it would not be reduced to this method of "saving the country through curves" to remedy the situation.
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Li Chaohui's smile froze when he heard this, and he said in a neutral tone: "There shouldn't be any need to explain matters concerning Tengda's strategy to an outsider, right?"
It must be said that being able to hit someone's pain point with just one mouth is also a skill.
At first glance, Zhou Dongsheng thought the other party was an established investment institution that could be on par with or even better than Tenda, otherwise he wouldn't be so loud.
Unexpectedly, Mr. Zhang was stunned for a moment. After hitting a soft nail, he shut up angrily and said nothing more.
I thought you were just faking it, but I didn’t expect you were really stupid!
Zhou Dongsheng couldn't help but sigh, but he didn't say much and followed Li Chaohui to the two seats at the front of the conference table and sat down.
This time, naturally no one like Mr. Zhang appeared again and said something like, "Why does this young man sit so far forward?"
After all, Zhou Dongsheng is no longer a nobody, and if he wants to invest in Wenxue Network, it is naturally impossible to bypass this strategic investor and second largest shareholder.
At this time, Yang Luyu, as the founder of the company, naturally had to personally entertain the financial sponsors and act as the talker. "Now that everyone is here, let's officially start."
"In order to seek better development for the company and further improve the content system of the company's two major short video platforms, Douyin and musical.ly, we have formulated the goal of Series B financing and are preparing to use 9% of the shares to raise funds from investors.
, for the company to complete the next stage of development goals..."
"As for the current company size, development status, etc., I believe there is no need for me to elaborate here. Everyone here should have done detailed homework and may know this company better than I do."
Yang Luyu made a harmless joke, but it is true. For investment institutions, understanding the details of investment projects is the most basic basic skill.
If necessary, they don't mind looking up three generations of the family tree. After all, even established investment institutions have suffered a lot in this regard when it comes to matters related to money.
As the saying goes, one learns from every experience. Investment institutions would rather spend more money to train their back-up team than cause their real money to be lost for no reason.
Although not making money is more uncomfortable than losing money, it does not mean that losing money is not uncomfortable for them, right?
So far, Wenxue Network's exploration of business models has achieved quite dazzling results, and it has been able to rush to the forefront of the industry as a dark horse for latecomers.
It also has unique overseas market advantages in the industry, and the competitive advantage formed by the superposition of the two is by no means vulnerable.
Even to a certain extent, this unique attribute gives it an advantage that the other two industry leaders who are deeply involved in the local market do not have.
This is undoubtedly the most important point for investors, and it is also the reason why Yang Luyu only chose to sell 9% of his shares in this round of financing.
In the process of corporate financing, only the angel rounds and A rounds, which are the riskiest, have the opportunity to get the most chips, and when the company finds a mature business model.
The position between the company and the investors has a bit of a switch between offense and defense. What's more, investors' sincerity in asking for money may not be able to impress the company.
At this stage, the resources that companies often need are no longer limited to cash, and they do not need to be selective in choosing investors, but rather select them with purpose.
Like Xunmeng Technology at that time and Wenxue Network now, they are undoubtedly companies above this stage.
Yang Luyu was like a dealer at the card table, throwing his chips on the card table, and then he looked like an old man sitting firmly on the Diaoyutai.
Other investment institutions looked at each other with different thoughts. A mere 9% of the shares was obviously not enough to satisfy the appetites of everyone present, especially when there was such a beast like Tenda.
If Tengda bites it off, the share left for them to divide will naturally be smaller.
To this end, the best way is to strike preemptively!
After sorting out the pros and cons, Mr. Zhang took the lead and said: "We at Jinxin Capital are willing to sincerely invest 1% of the shares for US$30 million."
Mr. Zhang was the first to break the silence at the poker table and immediately gave a very high valuation, directly raising the valuation of Wenxue Network to the US$3 billion range.
And this is obviously just the beginning. It's like throwing a brick and mortar to attract others. The total market share is only 9%. Naturally, others will not sit back and watch Mr. Zhang take away one-ninth of the share so easily.
And this valuation of US$3 billion was completely within their expectations.
After all, as early as half a year ago, the valuation of Kuaishou, which sits at the top of the industry, has reached the US$2 billion range.
As for Toutiao, a short video company that has entered the market, its valuation exceeds 10 billion U.S. dollars, not to mention Meitu Technology, which has entered the IPO stage. Meipai is only one of the company's main businesses.
Therefore, the market's valuation of Meitu Technology is also very fair, exceeding US$5 billion. After all, it also has other main businesses with outstanding performance, such as mobile phones and Meitu software, and has full potential.
For Wenxue Network, which currently occupies the top three positions in the industry, and relies on its unique overseas market advantages, it is even expected to compete for the top two positions in the industry. Naturally, its valuation cannot be lower than the US$2 billion range.
Of course, just one main business cannot exceed Meitu Technology’s valuation of US$5 billion. This is the approximate valuation range in investors’ minds.
"The sincerity of 30 million U.S. dollars is a bit insufficient, Mr. Zhang. Then I can only show my shame and put some icing on the cake. How about 32 million U.S. dollars?"
"What you said is true. If you say you want to add a little bit, you will add a little bit. It won't be too much at all. I'll put together a total of 35 million U.S. dollars."
The atmosphere in the conference room was extremely harmonious among the chatting and laughing among the representatives of investment institutions. Those who didn't know better thought they were haggling in a vegetable market.
However, in these few words, what is involved is a business worth hundreds of millions.
Zhou Dongsheng is sitting on the upper right, and the old god is mentally calculating, how much can his net worth increase after this round of financing?
No wonder people always talk about "paper wealth". This so-called net worth is really inflated. After all, with just these few words, the valuation of Wenxue Network has increased by US$500 million.
However, Zhou Dongsheng was not in a hurry. After all, the person who could really make the final decision had not yet spoken. Zhou Dongsheng couldn't help but look at Li Chaohui who was standing aside.
As if feeling Zhou Dongsheng's gaze, Li Chaohui coughed, and the other investors immediately silenced themselves in tacit agreement, and all looked at Li Chaohui.
Rather than giving Li Chaohui face, it is better to say that the value of the word "Tengda" is too great.
Having Tengda in the game and receiving Tengda's blessing will undoubtedly greatly increase the value of investment projects and make investors feel more confident.
This is the well-deserved "giant effect".
"We at Tenda intend to take half of the shares, and we are willing to lead the investment with a sincere investment of US$180 million. If you think it is okay, let's leave it at that."
Li Chaohui said calmly and at the same time expressed Tengda's position and attitude.
The other investors looked at each other in confusion, but after a moment they all nodded, "Sure, just do as Mr. Li said!"
"There are 4.5% of the remaining shares. In order to make it easier for everyone, I, Jinxin Capital, will be a little bit aggrieved and take 0.5%."
At this time, Mr. Zhang suddenly stepped back and said with a smile, as long as he can get an admission ticket, the task will be completed.
Who is not an old fox if he can sit in this position? Previously, he was in front of the horse and behind the horse, but now he chooses to take a step back, which is definitely enough for him to securely win this ticket.
Sure enough, no one raised a voice to object, everyone acquiesced, and then the remaining 4% share was divided up. Everyone was a decent person, and everything went on in an orderly manner.
Yang Luyu, who was sitting in the first place, couldn't help but feel a little confused. His company's valuation actually reached US$4 billion?
And this is the valuation before financing. It can rise a little bit more after financing. After rounding off, it seems that I have also obtained a ticket to the billionaire club?