"To what extent are you willing to accept Heyuan Power's Series B financing price increase?" Ding Zhaoqiang asked.
Cao Mo was interested in getting more shares in Heyuan Power's Series B financing, but Xu Bin and Chen Feng had been in contact with relevant parties. Cao Mo himself had not had time to discuss it in detail with Ding Zhaoqiang and Qian Wenhan.
This issue.
The founding team of Heyuan Power and the investors who participated in the first two rounds of financing are unwilling to see their shares diluted too much, so they limit the window for Series B financing, but this is not absolute.
As long as a new round of financing is launched and old shareholders do not participate in the new round of financing, the equity will inevitably be diluted; and it is impossible for the old shareholders to categorically refuse the company's subsequent larger-scale development plan just because they are worried about their equity being diluted.
new financing.
In the final analysis, it is still about the price, and what valuation basis should be used to conduct a new round of financing.
In 2008, the state officially carried out pilot projects to promote new energy vehicles in major cities through financial subsidies, including the research and development, production and sales of new energy vehicles, as well as the research and development of power batteries and other related parts, control systems and raw materials.
Production, sales, etc., have become new hot spots pursued by the capital market.
Therefore, as a technology company founded in 2005, Heyuan Dynamics is still quite optimistic about the capital market even though it has not yet made any profits.
Heyuan Power decided to conduct Series B financing at a valuation of 3 billion. This was also the result of discussions between the founder team and the previous two rounds of investors as well as new investment institutions and investors who were interested in Heyuan Power after several rounds of financing.
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If investors want to participate in a new investment institution, they naturally want the valuation to be as low as possible, so that they can obtain more shares at a lower cost.
The founding team and the first two rounds of investors hope that the higher the valuation, the better. Not only can they raise funds at a lower cost and promote the continued development of the company, but the value of the old shares they hold will also be higher.
The result of the balance between the two parties is that the founding team and investors accept lower valuations in order to obtain necessary development funds, but will control the opening window.
This also leaves more room for the next round, that is, round C financing at a higher valuation and IPO listing, otherwise the equity of the founder team will be easily wiped out.
However, if new investment institutions or investors are willing to directly give a high enough valuation, why would the founding team and the first two rounds of investors refuse to open up a larger financing space at once?
For the first two rounds of investors, especially financial investors represented by various private equity funds, the main purpose of participating in Heyuan Power's financing is to one day exit with a profit.
However, not all financing companies can eventually be successfully listed on the capital market. In the subsequent financing process, accepting new investors to acquire equity or reorganizing assets of different projects are also important channels for early investors to exit.
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Ding Zhaoqiang, Qian Wenhan and the industrial funds under Dongjiang Securities have all participated in the investment of Tianyue Industrial, and the two parties are also close strategic partners who cooperate closely and intend to maintain it in the long term.
Therefore, Cao Mo plans to incorporate Heyuan Power into Tianyue Industrial's industrial landscape. Even if they exchange part of their shares with Tianyue Investment, they will not completely withdraw from Heyuan Power.
However, as long as Cao Mo's price is high enough, he can acquire part of the equity from other investors to achieve actual control of Heyuan Power.
"The founder of Heyuan himself came from Xinhai University, and Zheng Yuyuan taught at Xinhai University before, and also had long-term research cooperation with Heyuan Power. Tianyue Industry officially launched the pure electric passenger car project last year, also at Heyuan Power
There is such a basis for cooperation in the research and development of vehicle technology based on the power battery and energy storage system. Zheng Chunyuan, Xu Bin and others are very familiar with the situation of Heyuan Power and have a very close relationship. They believe that the technology mastered by Heyuan
, The technological gap with Japan is no longer an insurmountable gap, and can even be shortened in a short time." Cao Mo did not deny that his idea of taking Heyuan Dynamics was not a day or two, and said, "I believe in their
Judgment, of course, their current suggestion is that Heyuan Power will conduct Series B financing at a valuation of 3 billion, which is worthy of Tianyue's participation, but I still have reservations. I will now prepare the preliminary preparations for Series B financing of Heyuan Power
I overthrew them all and started new financing negotiations. I thought that I would have to give 5 billion in financing to be sincere. Of course, in order to merge Heyuan into the industrial copyright of Tianyue Industrial, I can give a higher premium!
"
Tianyue Industrial's attempt to master the main manufacturing technologies or core technologies of mid-to-high-end passenger cars through R&D from scratch is nothing short of a fool's dream.
Putting aside the patent barriers of traditional passenger car technology, in the field of new energy vehicle manufacturing alone, many domestic companies have taken steps ahead of Tianyue Industrial and have accumulated a considerable technical foundation.
When developing technology, we must not forget to rely on our own efforts, but we must not shy away from embracing everything.
After Tianyue Industry merged the carmakers, its first-year R&D budget was as high as 15.6 billion, a considerable part of which was used to purchase technology patents and cooperate with external R&D institutions and companies to accelerate the improvement of Tianyue Industry's technical foundation.
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Heyuan Power masters technologies related to power batteries and energy storage systems, which are the core part of the new energy vehicle manufacturing field.
At the same time, Zheng Chunyuan, Xu Bin, Huang Yijiang, Gu Fan and others have a long-term R&D cooperation foundation with the operation and management team of Heyuan Dynamics, and Hexi Fund and Dongjiang Emerging Science and Technology Innovation Fund
They have also been major shareholders of Heyuan Dynamics for a long time and have deep personal relationships in many aspects.
These are the important reasons why Cao Mo is determined to directly incorporate Heyuan Dynamics into Tianyue Industrial's industrial territory.
"I thought you would wait until Tianyue's first off-road vehicle is launched in China and then decide whether to acquire Heyuan Power based on the market response!" Ge Jun said with emotion.
Ge Jun could see that Heyuan Dynamics was of great value to improving Tianyue Industrial's industrial landscape, but he was not as determined as Cao Mo.
His initial prediction was that Cao Mo would wait for Tianyue's first off-road vehicle to receive a good response in the domestic market, and then acquire Heyuan Power to promote further leap-forward development of Tianyue Industry after it has a certain market foundation.
"I don't want to put too much pressure on Xu Bin and the others, and the success or failure of Tianyue Industry does not need to depend on the success of a new car!" Cao Mo said, "Of course, the most important thing is Tianyue's overseas business.
There is now more than 2 billion in cash in the account, and I have to find a way to spend it!"
"You really have a lot of money and are willful. If you are optimistic about us, you don't have to be embarrassed to take advantage of you!" Qian Wenhan said with a smile.
Tianyue Industry completed its B round of financing at the end of last year. Cao Mo, together with Dongsheng Holdings and Dongjiang Industrial Investment Fund, injected more than 2 billion yuan at a time, which can ensure Tianyue Industry's capital expenditure until 2009. Therefore, in a short period of time, domestic There are no special projects that require Cao Mo to inject funds.
However, Tianyue Investment continues to receive huge dividends from Ibogu Mining and West African United Cement Group. These funds cannot be left in the account to earn interest, right?
Of course, Ding Zhaoqiang and Qian Wenhan can spend more than ten to two billion a year, but what they want to do now is to allocate part of their assets overseas, while Cao Mo wants to invest these funds domestically.
Cao Mo discussed with Ding Zhaoqiang and Qian Wenhan to set the tone. Chen Feng should cooperate with Shen Ji, Xu Bin and others to do the specific work...
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With the early cooperation foundation, and Dongsheng and Dongjiang being the major shareholders, the negotiations with Heyuan Dynamics were smoother than expected.
At the end of 2008, China mainly promoted the promotion of new energy vehicles through financial subsidies and other methods, attracting the attention of capital to this field. However, car companies and battery companies from various places competed for financial subsidies and launched a number of new energy vehicles. and power battery projects, most financial subsidies have been taken away by some companies with little technical content but deeper backgrounds, causing frequent chaos.
The situation has become more or less chaotic, which makes people worry about killing the goose that lays eggs. Many people are worried that the new energy vehicle industry will be reduced to a piece of chicken feathers when the storm passes.
Now that Tianyue has given such a high valuation, the original investors can exit at several times or even more than ten times the profit, at least partially, and of course they are not willing to miss this opportunity.
It is too difficult to go public, and we don’t know if we will have to wait until the end of the year; Heyuan Dynamics has no hope of achieving profitability in just one or two years.
The founder team headed by Kang Jianfeng mainly put forward two requirements. First, Heyuan Power should maintain independent operations and not be directly merged into the framework of Tianyue Industrial. They did not want to become a vassal of Tianyue Industrial's development of new energy vehicles.
The second is that Heyuan Dynamics needs to conduct B financing for Tianyue Investment based on a valuation of 6 billion.
Cao Mo has never minded competition within the Tianyue system. In addition to developing power batteries for new energy vehicles, Heyuan Power's main business has a wider range of application scenarios for energy storage systems.
Wind power generation and photovoltaic power generation, which are currently on the rise, have the biggest disadvantage compared with traditional thermal power, hydropower and nuclear energy. They are not stable enough. In theory, they need to be equipped with a certain proportion of energy storage systems to store energy to avoid serious waste of energy.
The construction of mobile communication networks is accelerating, and the number of base stations in various places is increasing every day. It is also clear that lithium batteries are the mainstream development direction of base station backup power supply.
These are the application prospects of energy storage systems. Heyuan Power is not willing to become a vassal of Tianyue Industry and give up these markets.
Furthermore, Tianyue's new energy vehicles are still under development, and it is still unknown how much production capacity it will ultimately have. If Heyuan Power gives up its efforts to provide power batteries for other car companies at this time, it will actually directly limit its own development space. .
Otherwise, why does Heyuan Power still need financing? Wouldn't it be enough to sell it directly to Tianyue Industrial?
As for the increase in the valuation of Heyuan Dynamics from 5 billion to 6 billion, Cao Mo did not hesitate.
Compared to the improvement of Tianyue's entire industrial landscape, Cao Mo really didn't care about the personal gains and losses of 200-300 million yuan at this time.
There were no tangled points between the two parties, and the plan was almost finalized in the first round of negotiations:
The first is that Tianyue Investment exchanged a total of 2.5% of the equity of Fulkov Petrochemical Group for 10% of the equity of Heyuan Power from Hexi Fund and Dongjiang Emerging Science and Technology Innovation Fund.
How to transfer this part of Fulkov Petrochemical's equity from Hexi Industrial Investment Fund and Dongjiang Xinjiang Science and Technology Innovation Fund to Dongsheng Holdings directly controlled by the Ding family and Xinhong Investment directly controlled by Qian Wenhan does not require Cao Mo
Worry; Cao Mo actually gave the Ding family and Qian Wenhan a 50% discount on their shares in the Fulkov Petrochemical Group.
The second is that Tianyue Investment purchased 10% of the equity of Heyuan Power from other investors with 750 million in cash.
The third is that Tianyue Investment injected 1.5 billion into Heyuan Power in exchange for 20% of the equity.
After the merger and capital injection is completed, Tianyue Investment will hold 40% of the shares of Heyuan Power, becoming the controlling shareholder of Heyuan Power; in addition, the founder group headed by Kang Jianfeng will hold 40% of the shares of Heyuan Power.
30% of the shares of Heyuan Dynamics and the remaining 30% of the shares continue to be dispersed among investment institutions and investors such as Hexi Fund and Dongjiang Emerging Science and Technology Innovation Fund.
Heyuan Power has received an investment of 1.5 billion, and in addition to supplementing research and development funds, it also plans to invest in the construction of a new power battery production factory.
Heyuan Power maintains independent operations and is independently responsible for the design and development of power batteries and new materials. The research and development of related core technologies such as power battery management systems is handled by a joint laboratory established by Heyuan Power and Tianyue Industry.
In addition to the corresponding requirements for Heyuan Power's main business performance, technical route and development, Cao Mo also hopes that Heyuan Power will place its production base in Chongxin Industrial Park in Chonghai as much as possible.
Chonghai has a good manufacturing foundation and strong scientific and educational capabilities, but it is weaker in areas such as power batteries, new energy and automobile manufacturing. Tianyue must try its best to form an industrial cluster in Chonghai in order to explore more.
Local human, scientific and educational resources.
Although Xinhai has a much stronger foundation in these aspects, Xinhai pays more attention to the development of joint venture car companies. It can also be said that the power of joint venture cars is too strong.
Tianyue and Heyuan Power have actually invested several billion yuan in total, but they have not received enough attention from the government in Xinhai. Industrial land and tax incentives are far less than the policies provided by Chonghai.
Under the personal promotion of Chonghai Municipal Party Committee Secretary Shan Zeming, Chonghai University has also directly carried out new discipline construction so that Chonghai's scientific and educational resources can provide supporting services for the development of Tianyue Industry in Chonghai, which is absolutely unparalleled in Xinhai.
benefits received.
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"When we drive a car in reality, we stare at the rearview mirror as soon as we park; when we drive on crowded urban roads, we are urged to run by the horn of the car behind us every day; when cars cross lanes, they are often unaware; at night
Alternating between high and low beams; cramping your feet when braking when encountering traffic jams; often subconsciously maintaining the original speed when cornering, as well as various safety problems encountered during driving, can actually be solved through smarter
Optimized driving assistance technology can avoid or minimize the occurrence of various accidents. The development of intelligent driving assistance technology must ultimately be to achieve driverless driving..."
Tianyue Industrial's R&D and testing center will move into its new location in early October.
The newly established R&D and testing center in Chonghai two years ago focuses on developing intelligent driving assistance and control technologies. It is also a core of Tianyue Industry's clear focus on breakthroughs in automotive electronic information technology.
Although the Intelligent Driving Control R&D Center has only been established for a short time, less than a year including the preparation period, Tianyue enjoys a patented intelligent driving assistance and control system and has developed a prototype.
Although in the eyes of Zheng Chuyuan, Gu Fan and others, the development of a prototype of the system is not that great. The maturity of the technology can only be said to be the first step in a long journey of thousands of miles. However, when you see the roof and the body of the car are filled with radars, cameras, wireless
The prototype car with various sensors such as receivers was in the test track, using short-range communication to achieve preliminary autonomous driving functions. Cao Mo and Cheng Xi both felt very novel and excited.
Of course, Zheng Jinyuan spoke modestly, but Cao Mo could still feel the pride in his heart.
In automobile manufacturing, in addition to traditional patent technology barriers, in emerging technology fields, everyone is almost on the same starting line. Zheng Chunyuan is still confident that he will not lag behind others.
When traditional international major manufacturers adopt and integrate new technologies, they are often constrained by the diseases of large enterprises and appear conservative and procrastinating. This is precisely a rare opportunity for emerging car companies to break through.
Of course, as Zheng Chunyuan said, the development of prototypes of intelligent driving assistance and control systems is far from success. There is still a long way to go before it is practical or partially practical.
Zheng Chuyuan joined Tianyue and brought a new motor drive technology he developed for power battery vehicles, but this new technology is not mature enough.
If this technology is to be applied to new energy electric vehicles, it is optimistically estimated that it will take more than three years of development cycle to mature.
The more critical aspect of this is the need to conduct a large number of simulations and actual road conditions tests, which requires extremely large investment of resources.
This is also the key reason why Zheng Jinyuan finally decided to join Tianyue.
The national laboratory he is responsible for at Xinhai University cannot spend so many resources on the later development of new technologies.
For other car companies, even those that have decided to enter the field of new energy vehicle manufacturing, they currently have mature and reliable motor drive technology that can be directly introduced and used, and they are unwilling to invest a lot in a project that cannot be directly applied in the short term.
New technology adventure of resources and time.
Tianyue acquired this technology and is willing to invest resources in later development.
For Zheng Jinyuan, this is more attractive than an annual salary of tens of millions.
Of course, the main reason for this is that Tianyue Industrial has deeply imbued Cao Mo with his own unique style.
Domestic car companies and joint venture car companies are currently at their peak, relying on overseas technology development and lacking the motivation to develop their own technology.
Car companies that manufacture and sell purely domestically produced cars are still struggling in the low-end market.
Only Tianyue Industry, with sufficient financial support from Cao Mo, has made hundreds of millions of dollars in profits from motorcycle manufacturing and sales, but it can be said that it has "unrestrainedly" spent more than 7 billion yuan on it.
Cao Mo didn't even frown, and even asked Tianyue Industrial not to have any idea of making a profit within five years. He was responsible for raising and injecting the tens of billions or more development funds needed from outside...