Article from WeChat public account:Investing in the Internet (ID: China-Venture), original title: “burn out 130 million users a year, 2 billion funding gap, scouring Chichi Broken Dreams financing, investor: way too wild”, author: Feng Xing Ying, head Figure from: East IC
For the underlying e-commerce that has no heavy assets and relies on mode and enclosure to win, the era of burning money breaks out.
The first time that Lin Feng heard about the project, it was in an in-circle gathering three or four months ago. The FA and the first-tier market investors, including the three or five people, talked about the recent projects. The collection integrates the most topics.
“The FA’s friend started, and the FAs in the room all want to participate in the financing of the collection, but this project is too hot, and does not need FA at all.” Recalling the party, Lin Feng remembers New, even if it is a management, it is also a sense of crisis for a certain period of time in order to get the investment share of the collection.
In the 2 weeks, the company has accumulated 2 million yuan in sales and 9 months of MAU over 40 million. This was once the transcript of the collection and the biggest bait for attracting traffic investors.
Now, the entrepreneurial dark horses that the employers are vying for have fallen into the altar, and the merchants who settled in the store have been surrounded by the headquarters of the Amoy collection on the 26th and 27th floors of Shanghai Wu Niu Holdings Building. It is expected to recover as little as a thousand dollars and as many as one million in arrears. The reply given by the Amoy collection is a financing failure, and these arrears are not repayable at the moment.
When the investment network went to the number of investors who had been vying for the share of the collection, the reply was mostly, “I don’t want to comment on this company, I can get the financing when I burn money. It has ended.”
Removing the East Wall to fill the Western Wall, the 2 billion funding gap is difficult to fill
“Centralized run” is the biggest crisis in the current gathering.
Taoji is a social e-commerce platform under Shanghai Huanwu Industry Co., Ltd., which was put into trial operation on August 5, 2018. The goal is to become China’s largest online market, serving 800 million monthly income below 2,000 yuan. The consumer, Zhang Zhengping’s other e-commerce brand “lightning price reduction” is considered to be its predecessor.
This is the big black horse that appeared in the social e-commerce circuit in 2019. Until the supplier concentrated debt collection, the entire Amoy team was sprinting the target of more than 80 million MAU in December 2019.
The investment network was informed by another investor who had contacted the Amoy collection that the funding gap for the Amoy collection was close to 2 billion yuan. According to the late LatePost report, since 2019, Amoy has lost nearly 1.2 billion yuan, net loss of 600 million yuan in the first half of the year, net assets of 600 million yuan, and current monthly losses of more than 200 million yuan.
If the funding gap of nearly 2 billion yuan is true, then where is this huge gap spent? Investing in the net learned that the Amoy collection does not accept merchant commissions, the internal strategic layer is extremely focused on pulling new, the usual way is to use the merchant’s money into the user to pull new.
The investment network landing on the Taoji collection platform found that for the first time registered users, the collection will send 1 yuan in cash, and the old user will invite 25,000 yuan for each new user to enter the platform. In addition, the Amoy collection will also be promoted in the very low-line cities by means of the trolley code registration and delivery, and will also be promoted by the owner of the husband and wife shop, and the new user owner can get the first 3 commissions. This subsidy pulls a new model and requires very high cash flow.
The Amoy collection does not charge commissions. Where is the high cash subsidy? The answer is to remove the East Wall and make up the Western Wall.
Before the accident, the number of users of Amoy has reached 130 million. When the users of the Amoy collection broke through 100 million, Zhang Zhengping once said that this is still not fast enough for the Amoy collection. In the second half of 2019, the collection will continue to accelerate and accelerate into the sinking market.
But the above investors have revealed to the investment network that the users of the Amoy collection are not optimistic. The merchants of the Amoy collection revealed that in the past six months, the collection period for the merchants at the beginning of the collection has been changed from the 7th day after the consumer confirms the receipt to the 1 month and 2 months after the confirmation of the receipt. 3 months, no more money after July.
Zhang Zhengping previously explained to the media that after the completion of financing, the crisis could be overcome. However, the key node of financing failure, suppliers were incited to “concentrate on money and concentrate on the run”, which eventually led to today’s situation.
At present, the solution for the collection of settled merchants and suppliers is that the former merchants’ resident mode has been converted into a partner self-operated model, and the existing major suppliers have been converted into Amoy collective shareholders. (Because the maximum number of shareholders of the company is 200, the merchant needs to agree that its shareholding is held by the actual controller of the collection, Zhang Zhengping). In the open letter of the collection on October 15th, it was claimed that a large group of companies in China had been negotiated for mergers and acquisitions, and all the purchases were used to repay the arrears. The claims with merchants and suppliers were also collected according to the collection of 550 million US dollars. Valuation for equity transfer. Many merchants do not agree with this solution.
Xinfeng, DST has been stationed, and many rounds of B-finance financing have broken their heads
Financing failure is an important reason for the dumping of dominoes.
But the collection was once a company that traffic-type investors could not vote for. Lin Feng revealed to the investment network that among the crowded investors, the Amoy collection selected the US dollar fund of the head office, but after giving the investment commitment, the growth curve of the employer on the collection was Higher requirements, formal investment did not follow the established time.
As the news that the China Investment Network learned in the investment community is consistent, Zhang Zhengping also said in an interview with the interface that “we are too high-profile in financing, and the other competitors have given us operationally.” After a sniper, the entire operation showed a state of GMV leveling.”
CVSource’s investment data shows that the company’s parent company, Shanghai Huanwu Industrial Co., Ltd., obtained the A$42 million A round of financing from Chongfeng Qiyun, DST and Tiger Global Management in October 2018, with a post-investment valuation of 2.47. One hundred million U.S. dollars. According to the “Hua Ning Industrial: Debt-to-Equity Transfer Agreement” disclosed by the Amoy collection business, in June 2019, in the B round of financing initiated by Amoy Jiji, it is planned to raise 200 million US dollars and value 80 million US dollars.
Financing Information Parent Company Shanghai Huanwu Industry Co., Ltd. Financing Information
Zhang Zhengping’s other project, “Lightning Price Reduction”, was awarded in October 2016 and August 2017 in the peak of Evergreen, Xianfeng Qiyun and ECM (Two rounds of financing for the Chinese sports and entertainment industry funded by the international private equity giant TPG and the CAA Group). After the shareholding of Shanghai Huan Shang E-Commerce Co., Ltd., the main body of “Lightning Price Reduction”, Zhang Zhengping and his main controlled Shanghai Huanxia E-Commerce Partnership held 59.5% of the shares, and ECM was the second largest shareholder. The amount is 16.7%, and the peak is the third largest shareholder, holding 14.59% of the shares.
Lightning price reduction parent company equity penetration chart, source: enterprise check
From the two projects of Zhang Zhengping, the peaks are the important employers behind them. The China Investment Network learned that when the B round of financing was launched in June 2019, the top ranked institutions in China were involved. But in fact, since July 2019, the sales performance of Amoy has been stagnant. In order to maintain the data of the financing period, the large-scale subsidies for the collection have not stopped.
“The road is too wild,” Lin Feng sighed at the investment network. “Take a supplier’s payment to make a new subsidy, which is tantamount to killing chickens and taking eggs.”
In the early morning of October 15, 2019, Zhang Zhengping’s letter of apology stated that “I made a great mistake, spending too much time on financing and trying to solve it through financing. The current growth problem has delayed the most golden self-help period.”