"The acquisition of Xiaomeng can not only expand into the youth market, but also complement the existing business of Zhonghe Group..."
At the board meeting of Zhonghe Group, Zhang Yida proposed a draft plan to acquire Xiaomeng.
The directors here are listening carefully. Acquiring a company with 50 million users is not a small matter.
They represent the interests of their respective companies and must weigh the pros and cons.
“College students have no income, and their living expenses come from family support.
In China's current situation, most families are far from being wealthy.
The monthly living expenses that can be provided to the children are only one to two thousand yuan.
So these students are our target users of Pinduoduo.
There are 27 million college students in school, and while nearly 8 million graduate every year, there will be an increase of more than 8 million.
This is not a small market. Once they develop the habit of shopping on Pinduoduo since college, they will slowly become loyal users of the platform.
As for DouShi, a large part of the video content is also provided by college students.
The acquisition of Xiaomeng not only enriches the content, but also expands our traffic boundaries."
Directors Shen Beipeng, Xu Xiaoming and other directors nodded repeatedly. As long as the decision is beneficial to Zhonghe Group, they will support it unconditionally.
Liu Zhiping crossed his arms and looked thoughtful.
Penguin has been paying attention to the development of the school cute. After discovering that it has not expanded without borders and stopped at the campus, it was a little relieved.
Although they Penguins are not afraid of competition, they also respect every opponent.
"How is the development of the workplace version of Xiao Meng?"
Liu Zhiping is more concerned about this. Millions of college students graduate from school every year. It would be a pity if they were lost in vain.
“There will be plans to guide graduating college students to download the school cute workplace version.”
Zhang Yida smiled and said: "Oh, by the way, the name has been changed now. It is no longer called Xiao Meng Workplace Edition, it is called Bole.com."
"Mainly engaged in workplace social networking, job recruitment..." Zhang Yida then explained what Bole.com mainly does.
"In other words, all graduated users of Xiaomeng will be transferred to Bole.com, and Xiaomeng will only provide campus social networking and campus services." Xu Xiaoming asked.
"Yes, this way the platform is purer and the user experience is better."
Bao Zheyu, who was appointed by BlackRock as a director on the board of directors of Zhonghe Group, asked: "After acquiring Xiaomeng and Bole, wouldn't it mean that we have become competitors with LinkedIn?"
Zhang Yida shook his head and chuckled: "Mr. Bao's news is a little delayed. Maimai's monthly active users have surpassed LinkedIn China. Now our biggest competitor should be Maimai.
I don’t deny that LinkedIn is very successful in the U.S. market, but it’s really not doing well in the Chinese market.”
Bao Zheyu shrugged, spread his hands and said, "Okay, I'm very sorry, it seems I need to spend more time understanding the Chinese Internet."
Zhang Liping became a director of Zhonghe Group on behalf of Blackstone Group. He is Chinese and is responsible for Greater China. He obviously understands the domestic Internet better than Bao Zheyu.
He asked Zhang Yida: "Maimai was established relatively early, in 12 years. It has been more than four years since its development. Does Bole.com still have the opportunity to overtake in corners?"
Zhang Yida looked at him and said, "If you don't do it, you will never have a chance. If you do it, there may be a chance."
This answer obviously did not satisfy Zhang Liping. He said: "Maimai CEO Lin Fan is not a simple person. He graduated from the Computer Science Department of Aoki University in 1998 and is a member of the core founding team of Sogou. He has participated in the entire process of Sogou input method, browser and other core project.
During his tenure, Sogou’s average daily search revenue increased 350 times from Q1 of 2007 to Q3 of 2010.
He also holds a PhD in data mining and machine learning from the University of Maryland.
At the end of last year, he announced that Maimai had reached revenue balance.
Bole.com has only entered this field now, and I am not very optimistic about it.
Workplace social networking is a vertical segmented field, and it is difficult for multiple companies to survive. It is basically a situation where one company dominates.
I think Zhonghe Group should focus more on social e-commerce and short videos.
Rather than trying to get involved in every field.”
The other directors turned their attention to Zhang Yida to see how he would reply.
"Dr. Zhang's suggestion is very good," Zhang Yida smiled, "but I don't really believe in evil. What I like most is that the last thing comes first.
Before Pinduoduo, there were Taobao, Goudong, Vipshop...
Before DouShi, there were Meipai, Xiaokaxiu, Kuaishou...
There are too many examples, so I won’t list them all.
We currently have 25 million white-collar users, which is not far behind Maimai in terms of number of users.
The only thing that lags behind is the business monetization model. We don’t have to worry about this until we capture 80% of the industry’s market share.”
Zhang Liping opened his mouth, thought for a while and swallowed his words. Zhang Yida had already said everything, so he couldn't argue anymore.
After all, the other party is the major shareholder and chairman, and he also has his own authority that needs to be maintained.
A small project is not worth destroying our relationship.
Then a vote was held, and except for Zhang Liping who abstained, the draft resolution to acquire Xiao Meng was unanimously approved.
…
The acquisition was entirely handled by the staff of Ruixiang Group and Zhonghe Group, and Zhang Yida did not interfere too much.
He is the major shareholder of two companies, so it would not be good if he favored either company, and the shareholders would still have objections.
Following his heart, he wanted to lower the purchase price because he held 38.18% of the shares in Ruixiang Group and 63.36% of the shares in Zhonghe Group.
The lower the purchase price, the most beneficial to him personally.
After many rounds of negotiations, the purchase price was finally set at US$500 million.
This price is reasonable for a school girl who has no income for the time being.
Ruixiang Group has no objection, because Xiaomeng has been established for less than a year and has spent a total of 500 million yuan on promotion.
Now the value has increased nearly 7 times, and the return is considered very good.
The shareholders of Zhonghe Group have no objections because the acquisition plan is "80% equity + 20% cash".
Ruixiang received US$100 million in cash and got back its initial cash investment.
Zhonghe Group issued an additional US$400 million in shares to Ruixiang, bringing the total valuation to US$40.4 billion.
Xiaomeng was originally a wholly-owned subsidiary of Ruixiang, and the 500 million capital injection also came from Ruixiang Group.
Therefore, the 0.99% additional shares issued by Zhonghe Group are to Ruixiang Digital Technology Group, not Ruixiang Industrial Investment Fund.
The GP of Ruixiang Industrial Investment Fund is Ruixiang Group, which holds 20% of the fund shares.
After completing this small merger, Zhang Yida's shareholding in Cayman Company dropped to 62.73%; Ruixiang Industrial Investment Fund's shareholding also dropped from 3.37% to 3.34%.
Other shareholders were also diluted in equal proportions, and their shareholding ratio dropped to 99% of the original number.
Zhonghe Group will own a number of Internet products such as DouShi, Pinduoduo, Musical.ly, Digua Video, Jimeng, Xiaomeng, and Bole.
In addition, it also holds part of the equity of Bilibili and Canxing Culture.
…
Zhang Yida hasn't seen Su Hua for a long time. Ever since he made a TikTok product, the relationship between them has gradually become estranged.
This time, under the auspices of Liu Zhiping, the two met at a private high-end club in Beijing.
Su Hua has a round face, wears glasses, and looks like an honest programmer.
When Zhang Yida saw this old friend whom he hadn't seen for a long time, he took the lead in extending his right hand and greeted with a smile: "Mr. Su, long time no see!"
Su Hua is not as free and easy as Zhang Yida, a little unnatural.
However, he quickly adjusted himself, shook hands with Zhang Yida with a smile, and said a few more polite words.
He used to have a good relationship with Zhang Yida, but that time passed to the beginning of 2015.
At that time, Ruixiang Industrial Investment Fund participated in Kuaishou’s B+ round of financing and invested US$30 million in the latter.
After that, Zhang Yida founded Douyin and entered the short video industry, and gradually the relationship between everyone became estranged.
When there are any meetings at Kuaishou, Zhang Yida always sends Lan Lan or others from the industrial investment fund to attend, mainly to avoid embarrassment.
Ruixiang is Ruixiang, and Zhonghe is Zhonghe. They are two different companies. And as a shareholder, Ruixiang does not usually sing against the grain. He just attends meetings honestly and checks the financial reports. His sense of presence is very low.
In this case, Su Hua did not clear out the few shares Ruixiang held in Kuaishou.
There are many shareholders like Ruixiang who have two interests in Kuaishou. Blackshirt Capital and Penguin are hedging their bets. Qiandu barely counts as half and also holds shares in Kuaishou.
The speed of development of DouYu was a bit beyond Su Hua’s expectation.
He sometimes reflects on why DouShi suddenly jumped ahead of Kuaishou, even though it started more than a year after Kuaishou.
What exactly is the problem? Did I underestimate the enemy too much?
Even if TikTok is so popular, overseas Musical.ly is also a dark horse.
It was only after they went to sea that they had a clear idea of how popular it was.
I heard from media reporters before that Musical.ly topped the APP store rankings, but they didn’t think it was that awesome.
When they went abroad this time and saw young people having Musical.ly software on their mobile phones, they finally realized the strength of Musical.ly.
Basically all the employees they recruit overseas are playing Musical.ly.
As the boss who arranged the meeting between the two, Liu Zhiping sat on the other side of the sofa. He looked at the two of them and said to Zhang Yida:
"Yida, don't you want to meet Su Hua? I've invited you today."
Zhang Yida nodded towards him: "Thank you Mr. Liu!"
In fact, what is the main purpose of this meeting? The three people present are very clear about it.
Liu Zhiping also wants to promote the merger of Kuaishou and Zhonghe Group to increase Penguin’s shareholding and avoid internal friction.
Su Hua took Kuaishou on a trip to Brazil and other countries. After seeing the power of Musical.ly, he felt a little shaken.
On the domestic battlefield, Kuaishou has lagged far behind DouShi, and the gap overseas is even more disappointing.
The winner-takes-all rule in the Internet industry inevitably makes him hesitate. How should he proceed?
With various complicated thoughts, Su Hua agreed to meet with Zhang Yida.
Zhang Yida thought about it for a moment and then spoke first: "Mr. Su, we are all from the Penguin family and are members of our own family. Fighting will inevitably damage our friendship and allow outsiders to take advantage of us."
Who is your family member? The public relations department of DouShi criticizes Sang and Huai every day and says Kuaishou is low. Now that you and I are together, why did you go there so early?
He thought so in his heart, but he couldn't say it. Su Hua smiled and nodded, "Yes, my family~"
Seeing such a harmonious scene, Liu Zhiping was very satisfied and became more sure of the success of the matchmaking.
The acquisition of Kuaishou is of great significance to Zhonghe Group.
Once successful, domestic short videos will be unrivaled, Pinduoduo’s live streaming e-commerce business will also gain wings, and Musical.ly can safely expand overseas...
The benefits are countless!
In the previous life, when Douyin gained such a huge advantage, Kuaishou was still valued at nearly 30 billion US dollars. It also took the war overseas and became one of the important obstacles for Douyin to dominate the world.
Whenever he thinks of these things, Zhang Yida's determination to acquire Kuaishou becomes stronger.
In addition to Zhang Yida who wants to promote the merger, shareholders such as Penguin, Blackshirt Capital, Ruixiang, and Qiandu all have this idea.
"Mr. Su, Kuaishou has also gone overseas. What are your thoughts on overseas markets?"
Su Hua looked at Zhang Yida and said seriously: "Short video, as a brand new track, is very suitable for replication and implementation overseas."
Zhang Yida nodded and said: "A short video platform with 1 billion daily active users and 2 billion monthly active users globally, do you think it can compete with Facebook and YouTube? Can it be regarded as China's first globalized platform?"