2003: Starting with Foreign Trade

Chapter 394 The Extravagance of a Makeshift Troupe

"Spark Group's ByteDance engine invests in SF Express, and Orange Technology signs a strategic cooperation agreement with SF Express!"

Orange Technology has completed its Series B financing round, co-led by Sequoia Capital and Tencent Investment, valuing the company at 7.6 million yuan!

"An internet wealth creation myth! Cheng Hao, a former employee of hog farm and now CTO of Orange Technology, has amassed a net worth of over 3000 million yuan in less than a year with the company!"

"An interview with Gu Qingqing, CEO of Orange Technology, on how she went from being a college student to a CEO with a net worth of over 100 million yuan."

"The internet journey of the founder of the industrial giant Flash Group has led to a valuation of over 3.3 million for Orange Technology alone!"

"Unveiling the Capital Structure Behind the Hit Game Happy Farm!"

Is Orange Technology's foray into vertical e-commerce a viable path?

After the Series B funding round officially concluded, several companies simultaneously released a joint statement to the outside world. Unlike venture capital firms, which tend to keep their funding rounds secret, internet companies disclose the amount and shareholdings for Series A and subsequent funding rounds.

In Tan Jincheng's view, it was more like an advertisement, since he had spent so much money and he had to make a sound; secondly, it was also a way to show other organizations that "I've taken over this place."

After its Series B funding round, Orange Technology had the backing of three major investment institutions: Qiming Venture Partners, Sequoia Capital, and Tencent Investment. With both money and resources, it was enjoying immense success.

The three investment institutions hold 12% of the shares respectively, and the two 10% stakes in the Series B round are held by the two founders, Tan Jincheng and Gu Qingqing, respectively, while their shareholdings have decreased to 43.55% and 14.05%.

CTO Cheng Hao's shareholding has been reduced to 2.4%, while the remaining 8% of the shares are held by the employee stock ownership platform.

Excluding the shares held by Cheng Hao and the employee shareholding platform, Tan and Gu alone still hold 57.6% of the shares, maintaining absolute control over the company. There is absolutely no need to worry about any problems arising in the company.

This is the advantage of having your own money in the venture capital round. Generally speaking, compared to the later rounds of investment, the venture capital round is the one where you give up the most equity. Without money, you are at the mercy of others.

Compared to the high-profile Series B financing of Orange Technology, the financing news of SF Express, which was announced at the same time, was much more low-key, and the specific amount of investment and shares were not disclosed to the public.

It suits Wang Wei's personality.

However, no matter how low Wang Wei tries to keep a low profile, the news still reached Shentong and Zhaijisong. With the three companies in a three-way competition, it's essential to monitor the public opinion surrounding their competitors.

Shentong attaches great importance to this news. The amount of money invested by Sequoia Capital is not important; what is important is that it is a signal that investment institutions are beginning to pay attention to the express delivery industry.

What troubles Shentong the most is the strategic cooperation between SF Express and Orange Technology. Orange Technology has handed over its fruit and vegetable transportation to SF Express, which has entered the market nationwide. In fact, this has not had a significant impact on Shentong.

The headache isn't with the fruit and vegetable business, since that requires high standards and Shentong doesn't have any plans for it at the moment. The real headache is with Orange Technology's vertical e-commerce business!
The three leading private express delivery companies each have their own territory: SF Express in South China, ZJS Express in the North, and STO Express in Central China. In addition, STO Express's biggest advantage is that they hold the vast majority of the market share in online shopping express delivery.

E-commerce express delivery has low unit prices, but it is a major trend in expanding market share. With the rapid increase in GMV of Taobao and JD.com, the amount of market share occupied in e-commerce express delivery will become an important factor in determining market share in the future.

Gaining market share among e-commerce users will be a challenge for all courier companies in the next phase. Unlike Taobao, which requires face-to-face interaction with merchants, winning over users is much more difficult, and some consumers even specify their preferred courier.

For large e-commerce clients like Jingdong that operate their own businesses, securing a major market share is crucial. Previously, Jingdong outsourced many of its deliveries to SF Express, but this year Jingdong has started building its own logistics network.

Who would have thought that just after losing a major client, another one would come along? Although we still don't know exactly what Orange Technology's vertical e-commerce business is about, or whether it can succeed.

Sigh, market competition is getting fiercer and fiercer. Orange Technology is no exception. We're all from Zhejiang, so why go all the way to Guangdong to find a courier partner?

While Shentong was grappling with the intensifying market competition, cheers erupted once again in Orange Technology's office area, this time with even greater excitement than before.

Holy crap! The boss is so generous!

The employees who were slacking off were thrilled to see in Gu Qingqing's interview that the employee shareholding ratio was as high as 8%.

This is the first time Orange Technology has implemented an employee stock ownership plan. In addition, both bosses are not in the company, and it is not easy to explicitly state how many shares should be given to employees for stock ownership because it is related to Cheng Hao's own interests.

He cashed out himself, so of course he knows how much a percentage of the shares is worth. The boss is quite generous, but you can't just ask him for it openly.

Moreover, many of the employees who participated in the initial startup were brought over by him. When participating in the employee stock ownership plan, if they explicitly ask the boss how much they should receive, it would be somewhat like using the boss's money to buy people's hearts.

One percent of the valuation is 760 million, and that one percent is enough to benefit many people. Therefore, most employees are not yet clear about the specific allocation of the employee stock ownership plan, as the official details are still being formulated.

"The employee stock ownership plan has actually existed since the company was founded, but since our company is a startup, we are still learning many of the details, but we are working on it as soon as possible."

"Taking advantage of this Series B funding opportunity, our employee stock ownership platform has also been officially established. It's not convenient to go into the specific plans here, but we have allocated 8% of our shares to participate in the employee stock ownership plan, which is something we can say."

Gu Qingqing's interview report on the employee stock ownership plan left some professional media reporters and financial personnel speechless, finding it unprofessional and reeking of being a makeshift operation.

But this makeshift team created a wildly popular social mini-game that swept the nation, appealing to people of all ages and genders, and built a new internet company valued at 7.6 million RMB.

With 8% of the shares, valued at over 6000 million, using so much money for an employee stock ownership plan is incredibly generous.

Sure enough, this is typical of FlashDrive's boss.

The memory of giving away 100 cars to employees of Flash Group hasn't faded from my mind yet, and now Orange Technology has announced an employee stock ownership plan worth over 6000 million yuan.

The public doesn't care whether it's a one-time payment or whether it requires spending money to buy; they only see the number 6000 million.

The aura of internet tycoons is palpable. Even the employees of NetEase are envious. Although they also have equity incentive plans, NetEase, which has been established for a long time, already has a very well-developed system.

Unlike startups like Orange Technology, the biggest drawback of a makeshift team is uncertainty. If they can't keep going, they go bankrupt. But the advantages are also obvious: if they succeed, everyone really gets rich, at least the first batch of employees.

This is the characteristic of internet companies.

In addition, after the Series B financing, the most discussed topic among the public was the net worth of Tan Jincheng and Gu Qingqing. Tan Jincheng's net worth increased by 2 million yuan, which is enough to reach the threshold of the top 500 on last year's rich list.

"Damn, is Happy Farm really that profitable? Or is Orange Technology's vertical e-commerce plan really that promising? Their net worth has skyrocketed by 2 million in just a few months. Why would they bother with real businesses?"

"Do you think Mr. Tan might just abandon his physical businesses and stop managing them? The wealth of internet companies is growing too fast! If he takes Orange Technology public, his wealth will increase even more!"

"Isn't the most enviable person Boss Tan's girlfriend? A junior in college, and she's worth over 100 million! That's outrageous!"

"According to reliable sources, Mr. Tan's girlfriend donated 800 million yuan to her school this time. It's a huge donation from a current student to a school."

"I'm not envious, I'm just envious of President Tan's employees. He's a real tycoon, he's so generous with his paychecks. I even want to go to Ningbo to find a job."
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"That's 7.6 million already?" Xie Junhong stared at the news on his computer screen, speechless.

He disagreed with Tan Jincheng's plan to merge Orange Technology into Flash Group. He believed more in tangible factories than in the vague valuation system of internet companies.

In its early days, Orange Technology launched a website that seemed to be thriving, but in his opinion, it was all show and no substance. Dozens of employees were crammed into one office and couldn't generate any profit. What value could they possibly create?
After Happy Farm became popular, he didn't really take it seriously until the project to help farmers was launched, at which point Xie Junhong became truly alert.

Having taken control of Beicang City Investment, he understood the significance of this matter; otherwise, Ningbo University would not have been so actively involved.

I originally wanted to find another opportunity to talk to Mr. Tan and see if I could get involved again. Whether or not I make money helping farmers is not important; what's important is participation.

However, after Tan Jincheng went to Shenzhen, Xie Junhong knew that such an opportunity was gone. The valuation of 7.6 million was still 7.6 million, and it had just slipped away.

Originally, Beicang City Investment could have made a large sum of money without much time.

Flipping through the news reports, Xie Junhong smiled wryly: "Now I finally understand what that kid meant when he joked that I shouldn't regret it."

This reflects a limitation in his investment mindset, and while it may not be considered a dereliction of duty, it is nonetheless a stain on his career.

He really needs to figure out a good way to deal with this, since he has indeed let a new internet company slip through his fingers.

The hype surrounding Orange Technology's Series B funding round is so exaggerated and so high-profile, it's clear that it's driven by capital backing. Furthermore, the planned vertical e-commerce website involves a number of industries.

With such a big commotion, it's impossible for the district not to take notice.

Sigh, I really don't know how to explain this.

(End of this chapter)