I can become stronger by paying salaries. I have one billion employees!

Chapter 160: Orange Raises $13.5 Billion in Series A Funding (Please Subscribe)
The following morning at around 9 a.m., a convoy of luxury cars drove past the east gate of the Xuyuan Academy and headed towards Zhuxianzhuang Science and Technology Park.

There are few buildings on both sides of the street. Apart from the school and the commercial street across the street, the vast area is farmland, planted with endless winter wheat.

"Shou Zhi, Orange Technology's headquarters are actually in a place like this?"

Yuri asked Zhou Shouzhi in English.

He had visited China and met many founders of technology companies, whose office buildings were all located in bustling electronics ports or software parks.

Orange Technology is the first company to set up its headquarters in the suburbs of third- or fourth-tier cities.

“Boss, China has developed rapidly in recent years. Although the surrounding facilities here are a bit lacking, there are universities nearby, which can replenish mid-to-low-level employees in a timely manner. Moreover, Orange Technology pays its R&D engineers 20%-30% higher than the market rate, so in terms of high-end talent reserves, it is not inferior to second-tier top mobile phone manufacturers.”

Zhou Shouzhi sat to Yuri's left and gave him a detailed introduction to Orange Technology's organizational structure and employee sources.

When Yuri learned that most of the staff in Orange Technology's R&D department came from Huawei, ZTE, OPPO, Xiaomi, and even researchers from Microsoft and Motorola, he immediately dropped his dismissive attitude.

“Orange Technology and Orange Mobile Phone Factory belong to different entities. Judging from Chen Yansen’s actions after receiving funding from Rakuten and Augusta, I think his business focus is more on manufacturing than on the research and development of communication products.”

Yuri frowned, cursing Chen Yansen for being too cunning.

The other party separated the research and development and production processes; DST only invested in Orange Technology.

In fact, Yuri was not very interested in the Orange Phone factory. Digital product assembly factories have low technical barriers and high investment costs, and the benefits they bring to DST are extremely limited.

“I think this is precisely where the other party is clever. From his move to build his own factory and supply chain, it is not hard to see Chen Yansen’s huge ambition in the communications industry.”

Zhou Shouzhi gave a positive evaluation.

It's worth noting that after the expansion of Orange Mobile's factory, the number of employees has approached 6000, with an annual production capacity of up to 3000 million smartphones. Equipment costs alone have reached nearly 20 billion yuan.
It's clear that they've made mobile phone manufacturing their core business for the future!

"Shou Zhi, I don't object to investing in Orange Technology, but a specific valuation can only be decided after assessment by financial and industry analysts."

Yuri gazed at the desolate scenery outside the car window and smiled faintly.

This investment was driven by Zhou Shouzhi.

Initially, he recommended Xiaomi as an investment target, but in the past three months, Zhou Shouzhi has completely abandoned Xiaomi and turned his attention to Orange Technology.

Yuri was very curious about what kind of business model Orange Technology used to impress this investment genius from Harvard Business School.

Zhuxianzhuang Science and Technology Park is less than ten kilometers away from the east gate of the Virtual Academy. Yuri and Zhou Shouzhi chatted for a while and then saw the office building area not far away.

On the facade of one of the six-story buildings, there is a striking orange logo.

Yuri knew they had arrived at their destination.

Chen Yansen received a call from the front desk reminding him to go downstairs with Gao Weilin, Ye Qiuping, and Wang Teng.

Everyone was dressed very formally today. Even Wang Teng, who is usually casual, wore a suit and his hair was neatly combed.

When they arrived on the first floor, DST's convoy had just arrived at the park entrance.

Yuri got out of the car, followed closely by Zhou Shouzhi, who was accompanied by more than a dozen people, including financial and legal advisors, as well as several strong foreign bodyguards.

"Mr. Yuri, Mr. Zhou, welcome to Orange Technology. Please come in."

Chen Yansen greeted him with a smile and in fluent Russian.

Yuri was taken aback, not expecting that Chen Yansen, a Chinese man, could speak Russian so fluently.

Unlike thirty years ago, the number of university students fluent in Russian is now extremely small.

“Mr. Chen, your accent is very standard,” Yuri couldn’t help but praise.

"Mr. Yuri, you flatter me. Shall we go to the R&D department first, or the industrial design department?"

Chen Yansen asked with a smile.

He learned his pronunciation habits from original language films. In addition to Russian, English, and French, he is also proficient in several other languages, including Spanish and Arabic.

For Chen Yansen, learning a new language is something he can master in a day or two; it's a piece of cake.

“Mr. Chen, if you don’t mind, I’d like to go to the design department first,” Yuri said in English this time.

After all, most of the DST's entourage only speak English, and Russian is inconvenient for them.

“No problem.” Chen Yansen nodded and walked to Yuri’s right.

The two walked side by side into the lobby on the first floor and took the elevator directly to the third floor.

The office space in Building 8 is not large, but the workstations are spacious and not crowded at all.

In terms of office space per person, Orange Technology is at least three times that of JD.com.

Of course, after securing funding, Liangzai Dong is planning to buy a plot of land and build a brand new headquarters building.

"This is the industrial design team, the area in front is the hardware design team, and the office area to the west is the testing team."

Chen Yansen led Yuri around, introducing the place as they walked.

"I've heard there are quite a few Motorola and Microsoft R&D engineers here? Mr. Chen, why don't you move your company headquarters to Shanghai or Beijing? That would be more beneficial for your company's recruitment efforts."

Yuri asked curiously.

"I'm waiting for the best opportunity," Chen Yansen replied with a faint smile, his answer ambiguous.

Yuri pondered for a long time but couldn't figure out his thoughts, so he had to give up.

Chen Yansen paid close attention to Yuri's expression, subtle movements, and breathing rate; none of these escaped his notice.

With his exceptional insight and reaction speed, he could easily see through Yuri's thoughts and predict his next move when they talked.

This was a significant advantage in subsequent negotiations. He was confident that as long as his asking price wasn't excessive, the other party would agree.

Afterwards, Chen Yansen led Yuri and Zhou Shouzhi on a brief tour of the Aurora Systems R&D Department.

Wang Teng held up an orange phone and demonstrated the theme design, personalized customization features, and core junk file cleaning algorithm of Aurora OS version 1.1.

Yuri took the phone, downloaded a game from the Orange App Store, and tried it out on the spot.

A 60Hz screen refresh rate, if placed more than a decade later, would likely be criticized by users for insufficient smoothness and sluggish interaction response, but in 2011, it was still a mainstream configuration.

Yuri didn't have a bad experience, after all, he knew that this phone only cost 300 US dollars in China, and its performance surprised him.

An hour later, everyone returned to the 5th floor.

Zhou Shouzhi and Gao Weilin completed their handover and, with their assistants, checked the financial and business data in the outer office area.

Chen Yansen invited Yuri to his office for tea, choosing Qimen black tea. Yuri took a sip and said, "It's a bit weak. Adding some lemon juice and sugar would make it taste better."

Chen Yansen smiled and said that tea has a wide audience and the way it is consumed varies from person to person.

He gestured to Ye Qiuping, asking her to get lemon juice and icing sugar.

Yuri was very curious about Chen Yansen. After sitting down, he had no intention of discussing business at all. Instead, he inquired about Chen Yansen's university life and entrepreneurial experience.

The document review can be left to Zhou Shouzhi.

Since they shared the same idea, they started chatting casually.

During the conversation, Yuri mentioned that his youngest daughter was studying for her MBA in the United States, otherwise he would definitely have brought her to meet Chen Yansen.

In his view, Chen Yansen is 1.86 meters tall, fluent in English and Russian, and has outstanding business acumen, making him an absolute standout among his peers.

His Dalia would definitely like this kind of man.

Upon hearing this, Chen Yansen jokingly said with a smile, "Then I need to take a look at the photos first."

Yuri laughed. He found Chen Yansen very interesting, as he exuded a strong sense of self-confidence.

He took out his phone and showed a photo of his youngest daughter. The girl had delicate features, long golden hair, bright blue eyes, and a tall figure.

Chen Yansen glanced at it but didn't say anything.

He'd ridden those pretty girls from the Arctic before; back then, Feiyu Technology recruited quite a few beautiful girls from the north. During the day, they worked hard selling goods in the live streaming room, desperately trying to make money for President Chen; at night, they would change into maid outfits and play the radish-digging game with President Chen.

Then, Chen Yansen took out a brand new, unopened Orange phone and gave it to Yuri.

"Thank you, I really like this gift," Yuri said politely.

Chen Yansen didn't care; it was just a formality.

He planned to have the brand department take some photos later and find a few media outlets to create a buzz, saying that the DST boss was absolutely in love with the Orange phone.

After finishing the pot of tea, it was time for lunch.

A convoy of more than a dozen luxury cars drove in a grand procession toward the rooftop garden in the city center.

After lunch, everyone returned to the science park.

Yuri suggested visiting Pinbei, and Chen Yansen readily agreed.

The two walked downstairs and into office building number 6, followed by two tall bodyguards.

At this time, Pinbei already had more than 100 employees. The technology department was busy developing the web version and mobile version of the product, the design department was finalizing the product style, and the business development department was contacting factories in industrial belts across the country to invite them to join Pinbei.

When they encounter a strong and interested factory, the sales staff immediately apply for a business trip to conduct an on-site inspection and sign a contract in person.

"Mr. Chen, does Pinbei need financing?" Yuri asked with great interest after taking a stroll around.

In his view, Tencent dared to invest $3 million and provide a primary entry point even before seeing a prototype of the product. If he followed suit and invested, it would be difficult for him to lose money.

After all, Tencent had already conducted due diligence on the investment, and its follow-up investment based on this correct decision naturally had a high probability of making money.

"Not for now. I will definitely contact Mr. Yuri once Pinduoduo launches its Series A funding round."

Chen Yansen laughed and casually brushed it off.

Unless Yuri can help him sell the goods to Europe and America, he doesn't want DST involved.

The afternoon passed quickly.

Yuri and Zhou Shouzhi left by car and returned to their hotel in the city. Based on the collected data, they conducted a comprehensive evaluation and calculated an estimate that satisfied both parties.

Chen Yansen's rejection of Zhou Shouzhi's 360 billion yuan offer last time indicates that his psychological price is much higher than that.

In the hotel conference room, after a heated discussion, the finance and data teams reached a consensus based on the price-to-sales ratio valuation model.

They gave it a high valuation of 460 billion, which is about 70 billion US dollars, more than three times the valuation of Xiaomi.

Although Zhou Shouzhi felt the figure was reasonable, Xiaomi, with sales of only 70 units, was valued at 20 billion US dollars, while Orange Phone, with sales of nearly 500 million units, was only valued at 70 billion US dollars.

It probably won't meet Chen Yansen's expectations!

Of course, valuation cannot be simply calculated using sales volume. Xiaomi's current low sales volume is simply due to its limited production capacity.

The price needs to be negotiated gradually; it can't be settled overnight. DST's investment delegation didn't expect to finalize the deal in a single day.

The next day, after learning of DST's offer, Chen Yansen decisively rejected it.

Yuri then consulted with Zhou Shouzhi, and after weighing the options, raised the offer to 90 billion US dollars.

They also promised to personally handle the negotiations between Orange Technology and manufacturers such as Qualcomm, Samsung, and Sony to negotiate supply prices and secure procurement discounts of 5%-15%.

"Let's forget about Shanxing. The screen suppliers for Orange phones are Di Dongfang and Huaxing."

Chen Yansen waved his hand and said.

In 2011, the quality of Sansung screens was indeed superior to that of domestic products, but these Koreans were rotten and would cut off supply at crucial moments.

Xiaomi frequently encountered this kind of situation in its first two years of operation, and only later did it decide to switch suppliers. Huawei has also been burned quite a bit.

This is why Dongfang later became highly favored by mobile phone manufacturers; Huawei, Transsion, and OPPO are all major clients of its.

The next day, Yuri left the city of the void.

Next stop: Hangzhou and Beijing, to visit Ali and Dong, since they are DST's key investment projects this year.

The fact that DST invests in two companies in the same sector simultaneously demonstrates the extent of its financial strength.

Two days later, news of Orange Technology completing its Series A financing round made headlines on major portal websites.

At the top of the news article is a photo of DST CEO Yuri, China region partner Zhou Shouzhi, and Chen Yansen.

This round of financing raised US$13.5 billion, valuing the company at US$90 billion, propelling it to become a leading player among second-tier mobile phone manufacturers in China.

Suddenly, Wang Xueting's recruitment work became much easier, with more and more R&D engineers actively applying for the positions, and the entire HR department was fully booked with interviews every day.

Even Wang Teng, Ye Qiuping, and others, as interviewers, had to participate in more than a dozen second-round interviews a day.

Xucheng, a small inland third- or fourth-tier city, is slowly gaining some fame in the tech world.

(End of this chapter)