What's wrong with me being a rich man?

Chapter 486 Burning Money
On the morning of July 13, the four investment institutions gathered again in Lingang.

In addition to discussing project financing, they also listened to Lü Haiying's assessment and plans for the project face-to-face.

"This will be another super app being created."

Lü Haiying gave it this positioning.

"President Yu is truly unwavering in his commitment to the concept of a super app." Zhang Suyang from IDG smiled and glanced at Yu Xing upon hearing the familiar term.

Yu Xing nodded: "I have always regretted the situation with WeChat. WeChat should have been a super app, but now it has become like this due to the mutual constraints between Alibaba and Tencent. It is indeed the influence of giants. In my original idea, the scale of WeChat + WeChat would be the complete version of a super instant messaging app."

Zhang Suyang clicked his tongue: "The two companies are merging into one? If it can succeed, I really dare not even think about it."

After a moment's thought, he commented, "I really can't imagine what WeChat + Wechat would be like. It wouldn't be a super app, it would be a national-level app. I feel like only QQ and Taobao can be called that, oh, and Baidu."

From the birth of WeChat to its sale, and then to the confrontation between Alibaba and Tencent, Zhang Suyang witnessed all of this, which gave him a preconceived notion and made it difficult for him to imagine what it would be like to unify the world.

In contrast, Yu Xing has always been subject to the division of the market by the two giants.

He stated definitively, "This is our assessment of the market. It's not just about improvements in basic infrastructure like mobile internet speeds, but also supported by data from current project cases. In the international market, we are developing our own MUS platform, while in the domestic market, we have Kuaishou, which has received investment from Red Falcon, and their data is quite good."

"Kuaishou now has more than 400 million daily active users, and the goal for the end of the year is around 800 million, or even more optimistically close to 1000 million daily active users."

"Kuaishou has been transforming into a short video platform for less than a year."

"This is also a practical testament to our efforts to develop the domestic market."

When discussing the domestic short video market, Kuaishou is an indispensable player. It transformed from a GIF platform to a short video platform in the second half of 2013, making it one of the earliest short video projects in China. Later, its listing in Hong Kong brought it to a peak market value of HK$1.8 trillion, making it incredibly successful.

However, in just over a year, Kuaishou's market value plummeted to over 3000 billion yuan, a truly dire situation.

Yu Xing's comments about the data that Kuaishou has not publicly announced make IDG, Today Capital, Qiming Venture Partners, and Zhejiang Investment Group feel like... how did such an outstanding project suddenly pop out of the rocks?

With 4 million daily active users and a target of 8 million, we are optimistic about reaching 10 million by the end of the year. Given the accelerating development of the mobile internet, wouldn't we be able to exceed 20 million, or even approach 30 million daily active users by the end of next year?

What if we were given a few more years?

Xu Xin pondered for a moment and couldn't help but sigh, "Smartphones have really expanded the market several times out of thin air. When WeChat came out, it was called a super app, but now it feels like there are projects everywhere that can be super apps. Kuaishou, Kuaishou, it's really not well-known."

The phrase "everywhere" is an exaggeration, but such data is incomparable to the feeling of the PC era.

Yu Xing agreed with this point, adding, "Kuaishou's current strategy is to penetrate lower-tier markets. They are relatively conservative in terms of spending money and raising funds. This strategy can reduce costs. What we need to do is to reach a wider user base, and we need to be more cost-insensitive in our approach."

Upon hearing this, the four investors immediately focused their attention, accurately grasping the key point.

“If you’re interested, you can download Kuaishou to experience its style, and then you’ll understand what I mean,” Yu Xingduo explained, and continued, “Carbon Silicon Data Company has already gained industry attention, which may also be related to me personally, so it’s difficult for me to assess the reaction to this incident right now.”

He wasn't trying to boast, but rather offering an objective analysis: "Our biggest concern is that Tencent will revive Weishi. The worst-case scenario we're anticipating is that Alibaba and Tencent will both enter the fray. The competitive environment we're considering is the fierce group-buying wars of the past few years. Therefore, our funding target this time is $3 million, which includes giving up 30% of our equity. The remaining 70% will be invested by Carbon Silicon Data in terms of technology, traffic, capital, and team resources."

Yu Xing presented the most formal terms.

The information conveyed in those words left the four investors to silently digest and ponder, and the meeting room fell silent.

Market capitalization and market share are easy to calculate: $10 billion, which, including the Red Falcon, amounts to $6000 million per company.

Lu Haiying added, "The carbon and silicon data could be allocated $5000 million."

"Your valuation and financing are really aggressive," Xu Xin commented objectively.

“We can return any unused portion to you,” Yu Xing said with a smile. “We’ll sign a buyback agreement. Carbon Silicon Data is going all out this time, aiming to create a significant gap from the very beginning. Our assumption is that BAT (Baidu, Alibaba, Tencent) all believe this sector is profitable. We don’t rule out the possibility of it becoming a capital-driven competition like the group-buying market.”

The group-buying war was clearly driven by capital. At its peak in 2011, there were more than 5000 group-buying websites nationwide, followed by more than 99% going bankrupt or being merged and consolidated.

The echoes of this battle still linger this year. Currently, Meituan, Dianping, and Baidu Nuomi form a dominant force, together accounting for over 90% of the group-buying market, with Meituan holding over 55% of the share.

Such a frenzied cash-burning competition has made venture capitalists particularly wary.

After thinking for a while, Zhang Suyang came up with a comparison of goals and status: "Therefore, the goal of Carbon Silicon Data is to make this project as successful as Meituan, and to aim for a winner-takes-all outcome from the very beginning."

The consensus reached during the group-buying wars was that the winner takes all, and once you fall behind, it becomes increasingly difficult to catch up.

At the same time, this situation has been observed to extend to mobile internet projects.

Yu Xing took a sip of tea and affirmed, "That's right. So, if there are such changes, we should be prepared for a money-burning war. But the selection process won't be as crazy as the group-buying market. Not many players will be able to join. We may have to rely on everyone to bring in more friends."

He hopes that Tencent will remain calm and, ideally, continue to acknowledge WeChat's top position within Tencent and maintain the use of short video features in Moments, rather than creating new competition.

Similarly, the same applies to Alibaba and Baidu.

This is the best-case scenario that Carbon Silicon Data Company hopes for; otherwise, it will be the same fate as BAT (Baidu, Alibaba, Tencent).

Alibaba and Tencent go without saying, but Baidu has clearly been trying to accelerate its mobile transformation in the past two years. "Baidu Nuomi" is also the only one of the three giants to personally engage in group buying, which Li Yanhong regards as the core move of O2O. It is possible that it has also seen the future of short videos and is getting involved.

Cai Haoyu of Zhejiang Investment Group broke the silence in the meeting room, saying, "We at Zhejiang Investment Group agree in principle to this $6000 million financing." Everyone turned their attention to Mr. Cai, who had been mostly silent until now.

Yu Xing remained silent, patiently waiting for what would follow.

Cai Haoyu's face was serious.

Zhong Zhiling waited a while, then couldn't help but ask, "So?"

"What do you mean, 'so'?" Cai Haoyu turned to look at the CEO of Silicon Carbon Data. "That's it."

Zhong Zhiling: "..."

If you speak in this way as a principle, then there will be non-principle-related twists and turns.

Cai Haoyu reiterated: "I believe in Mr. Yu's judgment, and I also believe in the conclusions drawn by Carbon Silicon Data through its trial of overseas markets. Since it is a super APP, since it is a new thing that is different from the previous content formats, and since the prospects are there, if Mr. Yu wants to fight the new thousand-group war, then we Zhejiang Investment will also join in such a war."

He was passionate and resolute.

Yu Xing smiled.

The next second, he said, "Zhejiang Investment Group and President Cai will definitely not regret it."

Seeing President Yu's attitude, Xu Xin and Zhang Suyang not only did not express their gratitude directly, but instead said that the other party would not regret it, which almost confirmed his confidence in his actions.

—Your operations are like Yu Xing's.

This saying still circulates in the industry.

Now that Yu Xing has personally intervened, what should be done?

“I had an emergency discussion with my partners yesterday. We were originally preparing funds for the follow-up financing of Silicon Carbon Group,” said Hu Xubo of Qiming Venture Partners. “We can now come up with a budget of $1 million. If anyone is concerned about the risks, we are willing to support an uneven distribution.”

He not only wanted to invest, but also wanted to invest more; however, he also made it clear that the Silicon Carbon Group could not seek further financing from Qiming Venture Partners.

Seeing that President Yu did not speak, Xu Xin went straight to the point: "One last question, how will this project be handled after making such a valuation right from the start?"

Yu Xing previously stated that the consideration of the subsidiary structure was because Carbon Silicon Data Company itself still needed to develop.

He carefully considered and said, "Carbon Silicon Data will eventually repurchase the project. The repurchase funds will definitely be discussed with everyone. As for the funds at that time, in addition to its own revenue, we are also considering whether to promote the listing of Carbon Silicon Data in the next two years. At that time, whether it is IPO financing or secondary market purchases, it is possible."

Carbon Silicon Data's growth is top-notch in the mobile internet sector. It broke even last year and is expected to be profitable again this year and next, with a promising IPO outlook.

As for how it will operate, it depends on the changes in the competitive landscape, but the methods are much more diverse than before when it directly confronted Tencent using WeChat.

Xu Xin nodded and had no objection to quickly finalizing the financing for this matter.

Zhang Suyang had to go through an extra step, and the final decision was made only after he finished talking to Xiong Xiaoge.

Ultimately, if it weren't for the unexpected exposure of Mus, Carbon Silicon Data Company would almost never have offered an opportunity for external financing. In addition, with Yu Xing's direct involvement, this time everyone was willing to invest.

We discussed more specific financing terms and project plans in the meeting room for a while.

Zhang Suyang suddenly asked, "What's the name of the app in China? Is it still called MusVid?"

Yu Xing shook his head in denial, saying that the domestic market would naturally use a name that everyone is more familiar with. When Douyin was first launched in China, it did try the English name "A.me", but after testing, the Chinese name was found to be more effective.

“We’ve been in meetings discussing strategic changes, and we haven’t really thought about a name yet,” Yu Xing asked. “How about Douyin? It’s the ‘dou’ of ‘shaking’ and the ‘yin’ of ‘syllable.’ It’s easy to pronounce, what do you think?”

The people in the conference room silently repeated the name.

Lu Haiying said, "It can be used. We can come up with a few more names to test the advertising effect. Anyway, it's easy to change them later."

Yu Xing nodded, and the name was temporarily decided.

Hu Xubo praised the name, then asked expectantly, "Where should we start with the domestic market?"

Yu Xing glanced at Lü Haiying.

Lü Haiying replied, "The Spring Festival Gala advertising bidding will be held at the end of next month, so we can start from there. In addition, we need to prepare a team for on-the-ground promotion, and we need to coordinate online and offline efforts."

Even though they were already prepared to spend a lot of money, the investors still frowned when they heard the entry point. Last year, Alibaba and Tencent raised the price of the Spring Festival Gala together, and they are destined to continue to compete this year. They are really going to throw money into it.

However, with a template-driven approach like the "battle of a thousand groups," this isn't entirely unacceptable.

The Lingang area of ​​Shanghai is quietly brewing an impact of cash-burning competition. Guo Shanfeng, who was obsessed with the automotive industry, has reappeared before the storm has passed, releasing detailed quality inspection reports on multiple products of Kobe Steel.

As is customary, the Baixiaosheng Forum immediately followed the lead of the automotive industry's disciplinary committee, giving this short-selling operation a name—"sudden reversal."

(End of this chapter)