Chapter 125: Valuation of 16 billion, a sucker (asking for monthly votes)
The next morning, as soon as Chen Yansen arrived at the Entrepreneurship Park, he called Lin Chenfeng from Penguin Investment Department, Zhang Suyang from IDG Venture Capital Fund, and Zhang Jiancheng from Siwei Capital.
Chen Yansen’s meaning was very straightforward: he wanted to sell 5% of the shares of FoxTao.
"Mr. Chen, I will communicate with Martin first and contact you when there is news." Lin Chenfeng implied that he would go to Liu Zhiping to ask for instructions on whether to accept the 5% equity.
Zhang Suyang and Zhang Jiancheng gave similar responses. They were both very interested in the 5% stake, but they had to re-evaluate the current business scale of FoxTao before determining the purchase price.
Chen Yansen didn't take it seriously. He was just going through the process to let them know. The news had to be released eventually.
At noon that day, some domestic venture capital institutions that are fond of the e-commerce track received rumors one after another.
The founder of FoxTao plans to sell 5% of his shares. As soon as the news came out, it immediately attracted a lot of attention.
In the field of shopping guide e-commerce, FoxTao is far ahead.
It has left Meilishuo, Mogujie and What’s Worth Buying far behind, and the latter can only pick up leftovers.
In the first quarter, it achieved sales of 1.5 billion (actually 1.29 billion), and set a full-year sales target of 10 billion. Once achieved, its sales and profit levels will be second only to Ali and Yidong in China, and even exceed No.1 Store and Dangdang.com.
Therefore, interested venture capital institutions have made offers one after another.
According to the user value valuation method, FoxTao currently has 3 million daily active users, and it is estimated that each active user can bring in 500-1000 yuan in profits, with a valuation range of between 1.5 billion and 3 billion.
However, FoxTao’s valuation during its A round of financing reached 2.8 billion, so Chen Yansen directly hung up on those venture capital firms that offered valuations below 3 billion.
After all, these people didn't think twice before making their offers, and Chen Yansen didn't expect them to offer more sincere terms.
If the price-to-sales ratio valuation method is used, based on the current daily sales of 30 million, the annual sales are expected to be 10 billion. Based on the e-commerce industry's average price-to-sales ratio of 1.5-2 times, the valuation is between 15 billion and 20 billion.
However, there is still a difference between shopping guide e-commerce and truly comprehensive e-commerce platforms.
Although most venture capitalists are optimistic about the development of FoxTao, they also feel that the ceiling is not high.
The highest valuation offered was 10 billion! The more stingy venture capital institutions used the traditional industry discounted cash flow method and gave a valuation of 7.2 billion.
Chen Yansen wanted to use the price-to-earnings ratio valuation method, taking an average of 20. Based on an annual profit of 600 million, a valuation of 12 billion by venture capital would be reasonable.
But no matter which calculation logic and valuation model is used, the valuation exceeds 6 billion, which shows that FoxTao already has the corporate strength of a unicorn.
Chen Yansen and venture capitalists are testing each other.
A week later, the venture capital firms that were truly interested gradually surfaced, namely Sequoia, IDG Venture Capital and Augusta Capital.
Among them, Augusta was the most interested and offered the most sincere price! They were originally investigating the business model of Ebates (the originator of the rebate business) and were preparing to invest, but then they learned that a shopping guide e-commerce platform with even faster development had emerged in the Asian market.
Less than a year after its establishment, annual sales are estimated to exceed US$1.5 billion.
This instantly piqued their interest! So, after investing 40 million US dollars in Ebates, the people from Augusta rushed to Hui'an, took the high-speed rail, and went straight to Xuyuan.
After receiving the news, Chen Yansen smiled faintly and thought: It seems that the investment institutions in Deng Deng Country are still generous.
Perhaps they have come into contact with Ebates and are more familiar with and trust this business.
Chen Yansen knew that unless he could list Fox Tao on the NASDAQ within two years, no matter who invested, it would be a losing deal.
After weighing the pros and cons, Penguin felt that FoxTao’s valuation was too high and that continued investment would not bring high returns, so it gave up first.
The situation of Siwei Capital is similar. They are small in scale and prefer to make a small investment for a big return. They felt it was not cost-effective and gave up the purchase right.
Ma Liyun of Ali was very interested, but he had to use the funds on hand to buy back Yahoo's 40% stake, so he was powerless and gave up.
May 9, 1 p.m.
Chen Yansen met Augusta’s investment team on the first floor of the Entrepreneurship Park. Except for a Chinese translator, most of the team members were from Lighthouse. It can be seen that Augusta Capital has not set up an office in Asia.
The reason why they are willing to invest money is probably because they are extremely optimistic about the future development of the shopping guide model.
But Chen Yansen knew that the shopping guide model had no future! "Mr. Chen, this is Augusta's investment manager Jody. He was in charge of the $40 million financing case for Ebates."
The translator pointed to the middle-aged white man next to him and introduced him politely.
“Hello, Mr. Chen, I’m Jody. It’s really hard to imagine that the founder of Fox Tao is so young.”
Jody, with his Mediterranean hairstyle and wearing a haute couture royal blue suit, enthusiastically extended his right hand to greet.
The translator was just about to translate Jodie's words and tell them to Chen Yansen.
Chen Yansen walked straight forward, shook Jody's hand, looked the "sucker" up and down, then greeted him in fluent English and invited him to visit upstairs.
The translator was stunned for a moment, then he was secretly happy. After all, these foreigners had paid the money, and he could get the money for free without doing any work. It was really fucking cool.
Jody was very surprised, he didn't expect Chen Yansen's English to be so good, with pure American pronunciation and no accent at all.
Chen Yansen took Jody and others to the second floor. The first person to be confused was Wang Zihao.
He knew Chen Yansen too well. He scored 80 points in the college entrance examination in English and was considered the most patriotic student in Class 8 of Grade 3. He relied entirely on guessing for words and guessing for listening comprehension.
Is this person who is talking to the foreigner really Chen Yansen? Wang Zihao is full of questions.
He did often see Chen Yansen reading books and watching movies with original soundtracks, but this progress was too exaggerated.
Augusta's entourage includes investment analysts, industry experts, and financial and legal advisors.
After everyone sat down, Jody went straight to the point and asked Chen Yansen for the balance sheet, income statement, cash flow statement, as well as user and sales data.
Seeing that the other party was eager to discuss cooperation, Chen Yansen didn't care and asked Hu Yun to distribute the information prepared in advance to Augusta's staff.
Afterwards, Hu Yun connected the screen projection and opened the data report.
Then Hu Yun looked at the translator and motioned for him to help introduce that the data was mainly in Arabic numerals and perspective charts, which the foreigners could understand, but the fields and headers were in Chinese and required translation assistance.
The translator nodded and helped Hu Yun introduce the current development status of FoxTao.
3 million daily active users! 30 million daily sales! Nearly one million new customers every day! Annual sales are expected to be 10 billion, with a net profit of 600-700 million! To be honest, FoxTao is not worse than Ebates.
Considering that China has a population of 1.4 billion and huge potential for e-commerce, Jody instantly confirmed his intention to invest.
Before coming to China, Jody's team analyzed the shopping guide market size, growth rate, share, and competitors, and FoxTao firmly ranked first in the industry.
During the conversation, Chen Yansen also proposed the idea of a rebate card. In the future, users of FoxTao will be able to receive rebates regardless of whether they shop in offline supermarkets or online B2C platforms.
Credit cards are combined with a rebate model, extending from online to offline.
Chen Yansen was good at making promises, which made the bald foreigner's eyes light up. He suddenly felt that China's shopping guide e-commerce track had great potential.
The idea of combining credit cards with supermarket rebates alone has a market value of tens of billions if brought back to China.
Chen Yansen smiled secretly. He didn't expect that the other party would take his casual remark so seriously.
In fact, these small methods of expanding the market will be tried by others in the future, but they will not be successful because of their small scale.
For example, if you go to a supermarket to buy a certain brand of shampoo, you can get advertising rebates from the brand by uploading the receipt. This is troublesome and easy to fake, and it cannot be implemented at all.
Chen Yansen is just fooling people. He had no intention of implementing these immature business plans. He just casually drew the pie in the sky when describing the prospects of FoxTao.
Jody's team stayed in the Entrepreneurship Park until 6 pm and took away a stack of data files before leaving.
"Brother Sen, when did your English become so good?" Wang Zihao came over and asked curiously.
"I found time to learn it." Chen Yansen said perfunctorily with a smile.
Now it depends on whether Sequoia and IDG can make a higher offer.
Zuo Hongyu helped him find a factory in Shenzhen, and Xu Dan even made a recruitment plan and was waiting for the funds to arrive.
Three days later, after comprehensive evaluation, Chen Yansen gave up Sequoia and IDG and chose to cooperate with Augusta.
The other party offered too much! With a valuation of 16 billion, Chen Yansen could get 800 million for this 5% stake!
If Chen Yansen, as the major shareholder, had not given IDG, Penguin and Siwei Capital the authority to transfer shares, Siwei would probably have been the first to jump out and sell all of its shares to Augusta.
After all, you can make hundreds of millions by buying and selling.
When the news came out, it caused a huge stir in the circle. No one expected that a big dog owner from the Lighthouse Country would be willing to offer such a high price.
With a net worth of tens of billions, Chen Yansen has become the top of the list of the post-90s richest people. Some fans believe that those who have a net worth of tens of billions are not even qualified to be Chen Yansen's stool.
Someone simply made a list of the world's richest people born in the 1990s, and ranked Chen Yansen and Facebook's Zuckerberg together. This list is so wild, but there are still many people who believe it.
Some even questioned that Zuckerberg was not qualified to be on the list because he was not born in the 1990s.
Chen Yansen didn't know whether to laugh or cry after finding out about it, but as he watched his Weibo followers skyrocket and rush towards 10 million, he said nothing and quietly posted handsome photos and released brand group trailers.
This blocked Chen Ou's "road". He had just received 10 million US dollars in financing, but in terms of appearance and ability, he was no match for Chen Yansen. If he really took the route of an internet celebrity entrepreneur, he would most likely be ridiculed.
By mid-May, under the promotion of Chen Yansen, the development progress of the Aurora system was more than half completed.
At the same time, Xu Dan began to recruit hardware design and industrial design engineers, and gradually transferred the employee contracts of the Aurora R&D team to the newly established Orange Technology Company.
On the other hand, Yidong received the largest venture capital since its establishment. Liu Qiangdong's heavy asset model was favored by DST, Tiger Fund and Sequoia Capital, and received 1.5 billion US dollars.
This was Liu Qiangdong's first attempt to challenge Ali's dominance in e-commerce.
(End of this chapter)
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