In addition to serving as the head of BlackRock's Asia-Pacific region, Bao Zheyu also holds many important positions such as senior managing director, global leader of corporate strategy, and member of the global executive committee.
He holds a high position in BlackRock, and his words basically represent the will of this giant financial institution that manages US$6 trillion in assets.
As the senior partner of Blackstone Group and chairman of Greater China, Zhang Liping has considerable authority.
But for large-scale bets involving billions of dollars, he is not qualified to make decisions for the headquarters.
He asked Zhang Yida to suspend the negotiations, and he needed to seek the opinion of the headquarters.
Liu Zhiping had discussed with Bonima in advance that Zhonghe Group must be well organized.
However, DouShi’s valuation of US$25 billion and its gambling terms still gave him some headaches as to how to maximize Penguin’s interests.
"How to bet exactly?"
After Zhang Liping left, Liu Zhiping fiddled with the teacup in his hand and asked Bao Zheyu casually.
"If the revenue does not reach 20 billion, based on the actual revenue achieved, the founding major shareholders and management will provide equity compensation to the Series B investors.
Revenue is between 15 billion and 20 billion, and Douyin’s valuation has been lowered to US$15 billion;
Revenue is between 10 billion and 15 billion, and Douyin’s valuation has been lowered to US$10 billion;
Revenue is between 5 billion and 10 billion, and DouYin’s valuation has been lowered to US$5 billion;
If the revenue is less than 5 billion yuan, the founding major shareholders and management will repurchase the shares of Series B investors at a premium of 20%."
Bao Zheyu also considers the issue very comprehensively. This year is a crucial year to prove the commercial value of DouYu.
If the revenue cannot even reach 5 billion yuan, then there is not much investment value.
No matter how many users there are and how active they are, what's the use if they can't make money.
Zhang Yida asked with a smile: "What about revenue exceeding 20 billion?"
"If it exceeds 20 billion, it is consistent with a valuation of 25 billion US dollars."
Zhang Yida chuckled, "Why are you, a foreigner, pretending to be confused for me?"
The bets signed by startup companies are generally one-way adjustments.
That is, when the company's performance is inconsistent and the listing timetable is not met, investors directly demand compensation from the founder.
If the company's performance exceeds expectations, investment institutions rarely compensate the founders.
This is the real investment world, and it is very unfair.
Of course, this depends on the strength of the company, the scarcity of the target, and the energy of the investment institution.
If the company is good enough and investors rush to invest, then the reward conditions are not non-negotiable.
As for BlackRock, the world's top asset management company, if they invest in a company, they will provide the company with a very strong credit endorsement.
There are many conveniences for international expansion, refinancing, etc. Therefore, they are relatively strong in negotiations and will not give too many favorable terms to startups.
However, Zhonghe Group is not an ordinary company, and Zhang Yida is not an ordinary founder.
He laughed and said: "The 5 billion range in the revenue betting plan is too broad. I think it is better to set it at 500 million.
For example, if there is a range of 19.5 billion to 20 billion, 20 billion to 20.5 billion is considered a normal completion of the bet.
20.5 billion to 21 billion, and the valuation is raised to 26 billion U.S. dollars. And so on.”
This plan is not very beneficial to BlackRock and greatly reduces the returns from winning bets.
Based on various data from DouYu, Bao Zheyu made his own guess that DouYu has a high probability of reaching 10 billion to 15 billion in revenue.
Because judging from Doushi’s current monthly advertising revenue of nearly 400 million, it will almost reach nearly 5 billion without growth in the next year.
If you work a little harder, you can still achieve revenue of over 10 billion.
But he was not sure whether the specific revenue would be 10 billion or 14 billion.
According to the plan proposed by Zhang Yida, if the revenue ends up being more than 14 billion, DouShi's valuation will be almost the same number, but the unit is US dollars.
This is several billion dollars away from the US$10 billion valuation he proposed, and the impact is not small.
Therefore, Bao Zheyu was very dissatisfied and firmly refused to agree to Zhang Yida's plan.
Not long after, Zhang Liping came back and said that Blackstone could agree to the bet.
But Blackstone also has its own conditions. The specific conditions are also about the details of the gambling plan. They are similar to the conditions proposed by BlackRock, and they are also more beneficial to investors.
Zhang Yida naturally refused, even though he was very confident of completing the 20 billion revenue task.
But what if something goes wrong in the middle? So you need to leave yourself a way out.
Regarding the bet between several parties, the biggest controversial points are still the division of revenue ranges and the increase in valuations when performance exceeds expectations.
Liu Zhiping made the final decision, "Choose a revenue range of 1 billion. If revenue exceeds 21 billion, for every additional revenue of 1 billion, the valuation will increase by 1 billion US dollars on the basis of 25 billion US dollars."
If the revenue is less than 20 billion, for every 1 billion revenue dropped, the valuation will be reduced by 1 billion US dollars based on 20 billion US dollars."
This plan may seem unfair to the original shareholders of the founder, but it is actually relatively fair.
Penguin, BlackRock, and Blackstone are not soft persimmons, so how can they be manipulated at will?
20 billion in revenue has become a very clear dividing line. Whether you cross this line or not, the treatment will be very different.
With revenue of 19.9 billion and revenue of 20.1 billion, the valuation gap reaches US$6 billion.
In order to prevent Zhang Yida from engaging in related transactions, the investor also added a restriction.
A series of companies controlled and invested by Zhang Yida, headed by Ruixiang, will only be able to place a maximum of 1 billion ads on Douyin in the next year.
Those exceeding this number will not be included in the gambling assessment indicators.
In addition, several investors will send financial audit consultants to Zhonghe Group to audit all advertising contracts and finances.
In order to prevent Zhang Yida from profiteering, several investment institutions also took great pains.
Zhang Yida agreed to all these conditions. Naturally, he would not think of relying on related transactions to support DouShi's 20 billion revenue.
It's about having enough confidence in the company. The heights that Douyin could reach in the previous life, Douyin will naturally not be worse than them.
Zhonghe Group's pre-money valuation is set at US$35.5 billion, of which Pinduoduo is valued at US$10 billion, Doushi is valued at US$25 billion, and the equity of Bilibili and Canxing Culture is valued at US$500 million.
The financing amount was set at US$4.5 billion, with Penguin leading the investment of US$2.5 billion, Blackstone Group and BlackRock Group each investing US$800 million, and Robin Lee Family Fund and Dongfang Yu Family Fund each investing US$200 million.
After the completion of this round of financing, Zhonghe Group's valuation will reach US$40 billion.
Zhang Yida’s shareholding ratio in Cayman companies will drop from 71.39% to 63.36%;
Ruixiang Industrial Investment Fund’s shareholding ratio dropped from 3.8% to 3.37%;
Blackshirt Capital, Zhenke Fund, and Huayi Capital also diluted their shares in the same proportion.
Penguin's shareholding increased from 9.47% to 14.65%, failing to achieve the goal of holding 20% of the shares.
This was also done intentionally by Zhang Yida. If Penguin was allowed to invest US$4.5 billion alone, it would almost achieve its goal of holding 20% of the shares.
But this is not a small amount of money, and it is very difficult for Penguin to take it out.
In addition, Zhang Yida attracted Blackstone and BlackRock on the grounds that he needed to introduce large international capital to help Musical.ly expand overseas.
Penguin finally gave up its plan to hold 20% of the shares.
BlackRock and Blackstone each took a 2% stake in Public Partners.
The shareholding ratio is not high, it is mainly financial investment.
The shareholding ratio of Robin Li and Dongfang Yu's family funds is even lower, each paying US$200 million in exchange for 0.5% of Zhonghe Group's equity.
To be honest, these two shares' investment does not make much sense to Zhonghe Group.
But Zhang Yida never slaps anyone with a smile on his face. If the two senior brothers wanted to buy shares, they would do so at a very fair price, so naturally they would not push it out.
Zhang Yida himself feels that Zhonghe Group's valuation of US$40 billion is still a bit overestimated.
But valuation, in addition to the company's current value, also includes investors' expectations for the future.
Whether the US$40 billion valuation can be sustained depends on the business development in one year.
Since Zhonghe Group was formed through the merger of Pinduoduo and Doushi, after the merger, it was still the first round of financing.
Although Zhonghe Group announced to the outside world that it was Series B financing, the media still called it Series A financing.
“Zhonghe Group completed the world’s largest Series A financing of US$4.5 billion!”
"In less than 3 years since its establishment, this company is valued at nearly 300 billion!"
This kind of title is still very eye-catching, and countless netizens have been deceived into clicking and
It must be said that the media's sparing no effort in publicity has brought a high degree of exposure to Zhonghe Group.
Many netizens know that there is another small giant in China, Zhonghe Group.
Together with Ruixiang, Didi, Toutiao, and Magnesium Group, they are known as the five small giants "RTMDZ". They are all unlisted Internet companies with a valuation of US$10 billion.
This news slightly diluted the negativity caused by Zhang Yida's selling Huimin Travel.
In the eyes of the public, selling a company is a sign of failure and is the behavior of a loser.
No matter there are thousands of reasons, Zhang Yida's selling Huimin Travel is a sign of decline.
He sold a company valued at US$6 billion and still has two companies valued at tens of billions of dollars.
Can such a person be called a failure in starting a business? Can he be called a Waterloo?
There are also many people who say that Zhang Yida is lagging behind in the battle for the throne of the "third largest Internet company".
Ruixiang's official valuation is still at US$27.5 billion, which is far behind Didi, which is valued at more than US$50 billion.
This time, Zhonghe Group reached a valuation of US$40 billion, slightly giving Zhang Yida a chance to win back a victory.
There are also some media that are too idle to express their opinions: the merger of Ruixiang Group and Zhonghe Group will instantly surpass Qiandu, with a valuation approaching US$100 billion.
And he also made a reasonable and well-founded comparison with penguins.
Penguin includes three main revenue segments: advertising, finance, and games. After the merger of Ruixiang and Zhonghe Group, the main business can also be developed around the three major segments of finance, e-commerce, and advertising.
Many well-known foreign media, including the Wall Street Journal, the New York Times, the Times, the Daily Mail... a lot of media have also made in-depth reports.
Including the founder Zhang Yida, Zhonghe Group's products and the number of users have all been introduced and elaborated.
This time, he no longer needs to be ranked with Brother Burp. The media has put the title of "the youngest billionaire in the world" on his head.
This is the first time for many young people in the West to know that Musical.ly, which they play every day, has such an awesome boss.
The level of awesomeness is not inferior to that of Zuckerberg.
News such as "a senior student" and "it has three listed companies" were all unearthed by Western media.
Zhang Yida's popularity around the world has also made a qualitative leap through this huge financing!