"I invite you all to come here today mainly to talk about Huimin Bicycle's Series B financing."
In the Huimin Bicycle Conference Room, Zhang Yida looked at the Gods of Wealth with a smile.
Huimin Bicycle has no funds coming in next month, and its working capital will be exhausted. However, Zhang Yida is not in a hurry and has been firmly controlling the pace of financing.
"No problem! Yida, can you tell me what the valuation is? What is the scale of financing? We at Gaoling Capital are very happy to participate."
Zhang Sanshi, founder and CEO of Gaoling Capital, was the first to express his opinion that he had missed Ruixiang and Yimin, and he did not want to miss Huimin Bicycle again.
GGV Capital, Qiming Venture Partners, Penguin and Didi also came. They are all interested in Huimin Bicycle, but they did not participate in the last round of financing.
Therefore, they are also determined to win Series B financing.
Zhang Yida sent a copy of Huimin Bicycle's operating data and financial data to all the investors present. After they all read it, he continued:
"Huimin Bicycle has currently deployed in all first- and second-tier cities in the country, and will expand to third- and fourth-tier cities in the next step.
There are 70 third-tier cities and 90 fourth-tier cities. A total of 160 cities, each with 10,000 bicycles, will require 1.6 million bicycles."
Seeing the investors looking a little weird, Zhang Yida smiled and said:
"Of course, this won't be done in one step. I plan to complete the full coverage of third-tier cities with this financing. At the same time, we will increase the number of bicycles in first- and second-tier cities.
So I plan to raise US$300 million in Series B based on the pre-money valuation of US$1.5 billion.”
"US$1.5 billion is a bit high. The A+ round of financing was only valued at US$625 million! In the past three months, it has more than tripled."
Zhang Sanshi was the first to speak and said that he valued the future development potential of Huimin Bicycle, but the valuation was indeed not in line with his wishes.
"Yes! Mr. Zhang, look at the loss situation of Huimin Bicycle. It loses 50 to 60 million every month, and you don't even know when it will make a profit!"
GGV Capital Tong Shijie also echoed.
"Then have you noticed? The loss of a single shared bicycle is narrowing, and it is already producing a scale effect.
In addition, in addition to cycling fees, our advertising fees also generate millions in revenue every month.
In addition to APP online advertising, we will also develop bicycle body advertising next.
Huimin Bicycle is destined to become a super APP with hundreds of millions of users. In the future, this will be a major traffic entrance that cannot be ignored."
Zhang Yida knew that these people were pretending to be stupid for him, so he might as well point it out directly.
At this moment, everyone was silent. Does Huimin Bicycle have potential? It definitely does. But Zhang Yida has a big appetite, and people like Tong Shijie who have dealt with him know it very well.
"1.5 billion US dollars, right! Penguin recognizes this valuation, but we must lead the investment."
Ren Yu smiled and said that Penguin is rich and they don't care about the gains and losses in valuation. What matters most is the share share and strategic layout.
Shared bicycles have become a new super traffic portal, and everyone with a discerning eye can see it, and Penguin is no exception. They have discussed internally that they hope to exchange a Jiugongge for shares.
It's Ruixiang and Goudong's trick again, using nothing to show off.
GGV Tong Shijie and Qiming Venture Partners Gan Renping are a little unhappy with Penguin’s price gouging, but they don’t want to give up the Huimin Bicycle project.
"Let's do this! We can agree to a valuation of US$1.5 billion, or Penguin can lead the investment, but we want the right to follow in the next round of investment."
Qiming Venture Partners Gan Renping knew that the situation had reached this point and was no longer easy to reverse, so he took a step back and hoped to get a co-investment right in the next round of financing.
Zhang Yida was quite surprised by Ren Yu's statement. He originally thought that there would be another quarrel today, but he didn't expect Penguin's assist to be so fierce.
Of course, Penguin didn't have good intentions either. Zhang Yida guessed that it was another resource investment. He glanced at Ren Yu and asked:
“Does Penguin’s shareholding provide cash or traffic access?”
"Hey, I think the number of Huimin Bicycle users is still a bit low. With the support of WeChat traffic, the number of users will definitely surge."
Come on, just as Zhang Yida expected, it is really another resource investment.
Although WeChat Jiugongge is good, Zhang Yida also wants cash. How can he build a car and sell it without cash?
"How to price the traffic entrance?"
Zhang Yida asked.
"Of course it's the same as Ruixiang. One hundred million dollars a year."
Ren Yu felt that this deal was a good deal for both parties. Penguin got the shares and Huimin Bicycle got the traffic, so he said naturally.
"The development of Ruixiang and the development of Huimin Bicycle are not on the same level. Calculating it this way is a bit unfair to Huimin."
Zhu Xiaohu, an old shareholder of Jinshahe Venture Capital, spoke up. He has shares in Huimin Bicycle, so of course he spoke for Huimin Bicycle.
"It's just that without Penguin's traffic entrance, it's not like Huimin can't do business. How can Huimin build a car without paying for it?
I think what Huimin needs most right now is cash, and flow comes second.”
GGV Tong Shijie had just been beaten by Penguin, and he couldn't help but say a few words.
"Huimin Bicycle is embedded in WeChat, which indirectly helps WeChat enrich its ecology. The asking price of US$100 million a year is indeed too high."
The speaker was Zhang Ying from Jingwei Global. Like Zhu Xiaohu, he was also a shareholder in the A+ round.
"Mr. Ren, you see so many old shareholders are against it. Should Penguin adjust its offer?"
Seeing that the atmosphere was a bit awkward, Xu Xiaoming came out to smooth things over.
"Yida, what do you think? You are the chairman, you decide."
Shen Beipeng was very decisive. Seeing that the negotiation had reached this stage, the person with the highest voting rights here was Zhang Yida, so he let him make the decision directly.
Zhang Yida is also very conflicted. He is very tempted by the traffic of WeChat Jiugongge, but he also feels that Huimin cannot afford the quotation of US$100 million per year at this time.
The most important thing for Huimin is to continue to increase efforts to occupy the market and launch vehicles.
He is very worried that Leech Financial Services Group will enter the shared bicycle market at any time. There is no threshold for shared bicycles, and the competition is capital.
If Leech Jinfu intervenes, things will be difficult to handle.
The solution is for Huimin to occupy an absolute market share as soon as possible so that Leech Financial Services can retreat.
Thinking of this, Zhang Yida did not hesitate and said to Ren Yu:
"The Jiugongge matter should be slow down for now. Huimin is still in urgent need of cash to invest in shares."
Ren Yu nodded and said, "Okay, you can also invest in cash. In terms of valuation, US$1.5 billion is a bit high!"
GGV's Tong Shijie almost laughed and said to himself, I know that Penguin in the old days is not kind-hearted and will buy shares without paying any money. Of course, the valuation will be raised! The most disadvantaged are institutions like them that use cash to invest in shares.
.
Immediately, Tong Shijie nodded in approval and said: "I think the pre-money valuation of US$1.25 billion is about the same, just double the previous round."
"The valuation of US$1.25 billion is more appropriate, and Gao Ling basically agrees."
Zhang Sanshi had already accepted his fate and planned to invest at a valuation of US$1.5 billion. Unexpectedly, there was a twist in the plot, which was an unexpected surprise.
"Well, Qiming Venture Partners will follow the crowd. It doesn't matter whether it's US$1.25 billion or US$1.5 billion. You just have to negotiate. Qiming will choose to invest in this round."
Gan Renping sold Zhang Yida for a good deal and did not participate in the joint price reduction.
"Mr. Liu, Didi hasn't expressed his opinion yet, what do you mean?"
Zhang Yida set his sights on Liu Jing, Didi’s president.
Liu Jing smiled and then said:
"I think everything is fine, or add a bet!"
"What are you betting on?" Zhang Yida asked.
Liu Jing thought for a moment and said, "Revenue, market share, and net profit will all work."
"What do you think?" Zhang Yida turned his attention to everyone.
"support!"
"Agree! The bet can be valued at US$1.5 billion."
"Let's determine revenue or market share! It's too early for net profit."
Liu Jing is still very proud. As soon as she opened her mouth, everyone expressed their support.
"How about setting revenue? Huimin Bicycle's current monthly revenue is 50 million yuan. Doubling it to 100 million is enough! The revenue target is 1.2 billion in the next year."
Zhang Yida said to everyone.
“The valuation of US$1.5 billion has increased by 2.4 times compared to the valuation of US$625 million, and the revenue must also be 2.4 times to be reasonable.
It is more appropriate to set it at 120 million per month and 1.44 billion per year."
Tong Shijie’s views were unanimously recognized by the investors present.
Zhang Yida estimated in his mind that with this financing of US$300 million, 1 million new bicycles can be built. Adding the original 700,000 bicycles, it is basically not difficult to charge a monthly riding fee of 100 million to 110 million.
If we work harder on the advertising side, we should be able to achieve a monthly revenue of 10 to 20 million.
Zhang Yida then nodded and agreed to the terms of the bet.
The gambling period is from March 11, 2015 to March 10, 2016, which lasts for one year.
During this period, revenue of 1.44 billion yuan was achieved, and the valuation was calculated based on pre-investment US$1.5 billion.
If revenue of 1.44 billion yuan is not reached, the shares will be recalculated based on a valuation of $1.25 billion.
At the same time, all parties have disputed the share of the US$300 million in Series B financing.
In the end, it was decided that Penguin would lead the investment with US$100 million, and Gaoling Capital, GGV Capital, Qiming Venture Partners, and Didi Capital would each invest US$50 million.
After Series B financing, the shares changed to:
Zhang Yida:45.33%
Option pool:5.33%
Huayi Capital:2.67%
Blackshirt Capital: 13.33%
Zhenke Fund: 3.33%
Jinsha River Venture Capital: 6.67%
Matrix Global:6.67%
Penguin Industry Fund: 5.56%
Gaoling Capital:2.77%
GGV Capital:2.77%
Qiming Venture Partners:2.77%
Didi:2.77%
Zhang Yida's shares have further declined, but because of the existence of AB shares, he still firmly controls 89.2% of the voting rights.
When financing, Zhang Yida put forward a requirement, that is, the investment must be received in one go, otherwise the investment will not be accepted.
Ren Yu blushed a little, Zhang Yida was referring to this, and he was probably talking about Penguin's default on investment funds.
He had no choice but to do what Mr. Ma said, so they had no choice but to obey. However, it was a bit shameful in front of the fellow villagers.
The financing amount of US$300 million, equivalent to 1.845 billion yuan, arrived quickly and was credited to Huimin Bicycle's account within a week.
After the money arrived, Zhang Yida breathed a sigh of relief. If it were delayed for a few more days, Huimin Bicycle might not be able to pay next month's salary.
This US$300 million is life-saving money. Huimin Bicycle has expanded too much and the capital chain is extremely tight.
Zhang Yida first remitted an advance payment of 300 million yuan to Fujitec and directly placed an order for 1 million bicycles.
The remaining balance of 700 million yuan will be paid after the manufacturing is completed at Fujitec, the product is inspected and passed, and the product is successfully delivered.
It’s still the old rules, including manufacturing and transportation. After leaving the factory, 700,000 of the bicycles need to be transported to 70 third-tier cities.
For the other 300,000 bicycles, 150,000 bicycles will be supplied to the four major first-tier cities, and the other 150,000 bicycles will be supplied to strong second-tier cities such as Lin'an, Rongcheng, Yuzhou, and Tianjin.