The signatory of this agreement is Huizhong invested on one side and some of the world''s top capital contacted by Fang Zhe in the world for more than a month.
Although there are many top global capital and institutions interested in investing in Huizhong, only a few can really get this big cake.
Among them, Carlyle investment group, Sequoia Capital, apple, Softbank of Japan, DST of Russia and a domestic red capital have invested a total of US $9 billion in Huizhong at a valuation of US $45 billion, accounting for 20% of the shares!
Round a financing of $9 billion!
On the morning of November 15, Fang zhe personally announced the strictly confidential news at the signing ceremony of Yanjing National Convention Center. All the invited media and journalists were completely stunned!
$9 billion. What''s the concept?
According to the current exchange rate of RMB against the US dollar close to 7, it is 63 billion yuan!
More than 60 billion ah, this figure is more than twice the total annual net profit of Baidu, Tencent and Alibaba! It is six times of Tencent''s profit of nearly 10 billion a year!
A huge sum of money is absolutely unimaginable!
In previous lives, Facebook, which defeated mysapce to dominate the social networking industry, had a market value of more than $100 billion when it was listed, and the financing amount was only $16 billion. Alibaba was listed with a market value of more than $200 billion in 2014, and the financing amount was only $23 billion.
With the valuation of hundreds of billions of dollars and the largest wool cutting feast of listing, it is reasonable for the two companies to get such a high financing amount. However, now, Huizhong, with a valuation of 45 billion dollars, is the first external financing, the a-round financing, and gets a financing of up to 9 billion dollars!
The round a financing of US $9 billion has never been in China or in the world!
Even more than 95% of the world''s listed companies are far from reaching this figure, let alone several rounds of financing before listing.
If Huizhong carries out round B, round C and even def financing until listing, to what extent should Huizhong''s financing amount and valuation scale be high, and how many capital and large companies around the world are willing to be and can afford this takeover?
The valuation quota of Internet companies can be calculated in two ways: one is the net profit multiplied by the P / E ratio, and the other is calculated in a more complex way according to the business scale, such as the number of registered users and the number of active people. The latter is mainly for start-ups that have not yet made a profit, but how can it not make money for a company like Huizhong?
Therefore, according to the volume equivalent to Tencent''s valuation, many people outside speculate that Huizhong''s current annual profit scale has been nearly or even more than 10 billion yuan!
The annual profit of Huizhong, which has been established for two years, has exceeded 10 billion. This legendary development speed and profitability have numbed the outside world. However, what surprised the outside world, especially the domestic investment circle and Internet industry peers, is that Huizhong can finance US $9 billion, nearly more than 60 billion, which is also six times the current net profit of Huizhong, If we don''t consider Huizhong''s future profit growth, this money is equivalent to Huizhong''s six-year profit!
Six years! What concept? Taobao and Alipay just started six years ago. Tencent just came into the market six years ago, and its market value was only 500 million dollars. Apple was still in decline after six years ago, NOKIA is very influential.
In six years, there are too many variables. No one knows what the Huizhong meeting will look like in six years. Has it grown into a world-class multinational giant or is it a flash in the pan and going to decline? If it is the former, it''s worth mentioning. If it is the latter, the investment of more than 60 billion will be wasted!
Therefore, many invited investment circles and peers in the Internet industry were surprised that Huizhong could raise $9 billion in round A. what surprised them even more was that the leader this time was apple!
Among the $9 billion investment, Apple has paid half of the $4.5 billion. Therefore, Apple has obtained 10% shares of Huizhong and become the largest foreign shareholder of Huizhong!
"How did Huizhong hold the apple thigh?"
"Has Huizhong had such a good relationship with apple?"
"Why should Apple invest in Huizhong? Is it because Huizhong''s mobile game business is too profitable, or because of its 91 assistant?"
"Stupid, of course it''s because of wechat. Didn''t you read the blog sent by Mr. Li the other day? About the valuation analysis of Huizhong''s $45 billion! Of which, Mr. Li valued it at $10 billion!"
"US $10 billion? Didn''t wechat just break through 100 million users two months ago? Even after two months, it won''t exceed 200 million. YY had 100 million users six months ago, and the valuation is only hundreds of millions of dollars!"
"I''ll show you how it works! Can it be the same? YY''s potential is stabilized by QQ. Users are still in China, and YY is not an instant messaging software. It''s normal for users not to go online for ten and a half days and months, but wechat? I tell you, I don''t feel comfortable except sleeping and don''t open wechat every two hours! The potential between the two is fundamental There''s nothing better than that! "
"No matter what you say, I still feel a little unrealistic. It''s more than 60 billion. Even if you sell Huizhong, you don''t have that much money!"
"Why don''t you sell you!"
......
It''s no wonder that many audiences and media who heard the news talked about it one after another and felt unrealistic. Even Fang zhe himself, the amount of financing discussed with senior executives at the beginning, only raised $4.5 billion at the cost of 10% shares, which was nearly $30 billion, enough to make Huizhong''s capital situation never bad and turn money into inhuman!
However, Fang zhe obviously underestimated the appetite of these capital. 10% of the shares are not enough for several capital and institutions to divide up.
Therefore, after discussing with Zheng Siwen, Li Yifei and other shareholders, Fang zhe increased the proportion of shares transferred to 20%. After the financing was completed, Fang Zhe''s share decreased from 73.95% to 59.16%, Zheng Siwen''s equity changed from 21.55 to 17.24%, Li Yifei, Chen Yimei and other executives held 3.6%, apple held 10%, and foreign investors such as Carlyle Group and Softbank held 10%.
In addition, while Huizhong completed round a financing, in order to motivate the core backbone of Huizhong and attract more high-end talents, Fang zhe listened to Zheng Siwen''s suggestions. All Huizhong shareholders, large and small, gave up 5% of their shares as an option pool to formulate a long-term equity incentive plan. So far, Fang Zhe''s shares have further decreased to 56.02%, Other shareholders also have a corresponding decline.
Although Fang Zhe''s shares are close to the red line of 50% control, his voting rights on the board of directors exceed 90%. Therefore, even if Fang Zhe''s shares are really diluted below 50% when Huizhong is listed in the future, Fang zhe still has absolute control over Huizhong!