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

Chapter 383: Valuation of $58 Billion, Wang Xin's Little Scheme! Soaring Option Value!
Five days later, Tencent, Ali, Huake, and Kuaipao signed an investment intention agreement in Shanghai.

The content involves core commercial terms such as investment amount, valuation, equity ratio, and closing conditions, as well as exclusivity conditions, which require Kuaipao not to negotiate financing matters with other investment institutions within three months.

Before completing due diligence and signing a formal agreement, the investors in KuaiRun's Series B financing were only Tencent, Ali, and Huazhong University of Science and Technology.

Kuaipao's total transaction volume in 2012 was 317 billion, mainly from food delivery. Based on the industry's average price-to-sales ratio and its 90% market share, thanks to the efforts of Gao Weilin and Pei Yi, they finally achieved a multiplier of 1.2, that is, 317 billion multiplied by 1.2, and the valuation was set at 58 billion US dollars.

Compared to its valuation of 12 billion during its Series A funding round a year ago, the increase is 483.3%.

In other words, if the investment institutions that participated in Kuaipao's Series A funding round had invested 1000 million yuan at that time, the company's valuation would now be 4833 million yuan, nearly a five-fold increase.

Ali led the investment, with Tencent and Huazhong University of Science and Technology participating, investing $8.7 million to acquire a 15% stake in Kuaipao.

After the financing is completed, Senlian Capital's shareholding ratio will become 67.9%, Penguin 10.1%, Ali 9.4%, Huake 4%, and Chen Yansen will still firmly hold the controlling stake.

Although Kuaipao did not announce it to the public immediately, its peers quickly received the news due to the large scale of the financing.

"$8.7 million? Have Tencent, Ali, and Huazhong University of Science and Technology gone mad? How can Kuaipao get a valuation of $58 billion!"

Zhang Tao of Dianping was extremely dissatisfied.

"Although Kuaipao's annual sales are only slightly over 300 billion yuan, its growth rate is extremely fast. In January alone, its takeaway and group-buying business generated 43 billion yuan. It is estimated that the total revenue for 2013 will reach more than 500 billion yuan."

"This is what co-founder Li Jing, who was sitting to the side, explained."

Zhang Tao sighed dejectedly and waved his hand, saying, "I understand what you're saying, but I'm just not convinced. Dianping went through two years of fierce competition to emerge from the group-buying war, and before we could even enjoy the joy of victory, Senlian Capital reaped the rewards. Is that fair?"

"Brother Tao, the business world is like a battlefield; where is there any fairness?" Li Jing said with a wry smile.

Back then, Dianping also climbed to the top three in the industry by stepping on the heads of its competitors.

Now that they've been trampled underfoot by Kuai Pao, they naturally have no right to clamor for fairness.

"How many orders does the food delivery business have per day?" Zhang Tao asked casually.

"Yesterday, we exceeded 30,000 for the first time, but new customer orders accounted for 85.7%, the retention rate of first-time customers was only 7.4% the next day, and the repeat order rate was only 2.1%." Li Jing was somewhat embarrassed to say it.

To put it bluntly, all the users on Dianping's food delivery channel came for the "15 yuan discount on the first order". Of the 100 customers who took advantage of the offer, only 7.4 were willing to come back to the channel the next day, and only 2.1 were repeat customers.

This data is absolutely terrible!

Zhang Tao's lips twitched, he gasped, and his vision went black for a while before he came to his senses.

Compared to the conversion and retention data from the previous two days, it seems to have dropped by half again.

The food delivery business has only been online for a week. Although Dianping had no prior experience in this area, it poached a group of key personnel from Baidu and Meituan Waimai. It shouldn't be this bad, right?
He looked at Li Jing and asked, "Where is the problem?"

“The riders’ ability to fulfill orders is insufficient, the order allocation algorithm is frequently making mistakes, and there are serious bugs in the delivery route planning.”

Li Jing spoke the truth.

In fact, both Baidu and Meituan Waimai have done a terrible job in these three areas of technology.

Dianping directly adopted the technical solutions from these two companies, so it would be strange if no problems arose.

The food delivery industry has low barriers to entry, but high technical barriers.

To improve the accuracy of order allocation, capacity scheduling, and route planning, Chen Yansen spent nearly 5 billion yuan to acquire AutoNavi and poached hundreds of algorithm engineers from companies such as Microsoft, Google, and Ali.

The total investment involved hundreds of billions of yuan in human, material, and financial resources!

Zhang Tao thought he could replicate KuaiPao's successful model by poaching a dozen or so programmers from Baidu and Meituan Waimai?
It's like a dream!
"We need to resolve this as soon as possible. As an extension of the group-buying business, food delivery has a much higher repurchase frequency than group-buying. Whether Dianping can secure the next round of financing depends mainly on the performance of its food delivery business."

Zhang Tao, with a solemn expression, gave Li Jing his instructions.

“Okay, I understand,” Li Jing nodded in response.

However, in the eyes of users, Dianping's food delivery system is worse than Meituan and Baidu, with a rider delay rate as high as 30%.

Users are criticizing delivery riders, and delivery riders are criticizing the company.

For example, the delivery address is clearly Longhua, but the system plans the destination as Longhua Middle Road. Isn't that ridiculous?

If the first order wasn't free, who would bother using Dianping to order takeout?

The detour Zhang Tao is taking now was one that Li Yanhong and Wang Xin had also taken a few months earlier.

the other side.

After learning that Kuaipao had raised another $8.7 million, Wang Xin felt immense pressure.

Faced with a competitor who has neither a lack of money nor a lack of traffic, he really felt a bit at a loss.

They couldn't compete with Kuai Pao on price because they lacked the financial resources of others.

In terms of technology, Meituan is far behind its competitors. Although it has been in the food delivery industry for more than five months, its positioning accuracy and order allocation are still appalling.

Gaode refused to cooperate and refused to provide data interfaces; Baidu's map data contained inaccuracies.

One is a true villain, the other a hypocrite.

Meituan doesn't even have first-hand map data, so how can it do food delivery?

In a fit of anger, Wang Xin decided to handle the data himself. However, after inquiring, he learned that he needed to apply for both a Class A surveying and mapping qualification for navigation electronic maps and a Class A surveying and mapping qualification for internet map services to be considered compliant.

By the time he gets the qualifications sorted out, Meituan will be long gone!

This is another important reason why he scaled back his food delivery business.

Let's pull back our fists first and hold onto our small piece of the group-buying business.

"Knock knock knock—!" A series of urgent knocks on the door interrupted Wang Xin's thoughts.

Before he could react, Wang Huiwen rushed in, looking helpless, and said, "Brother Xin, Juhuasuan wants to terminate the partnership."

"Ali bet on Kuaipao, but it's also an investor in Meituan, isn't it?" Wang Xin suddenly stood up and angrily questioned.

However, Kuai Pao's valuation is $58 billion, while Meituan's is only $400-500 million, less than one-tenth of Kuai Pao's, so their values ​​are naturally different.

Wang Huiwen silently complained.

In fact, Wang Xin knew in his heart that Meituan had too few bargaining chips, so it was normal for it to be looked down upon.

But Ma Liyun's actions went too far!
Kuaipao isn't a subsidiary of Ali, so is it necessary to remove Meituan from Juhuasuan?
"What about Dianping and Lashou?" Wang Xin then asked.

"The same treatment as us," Wang Huiwen replied expressionlessly. Damn!
Wang Xin cursed under his breath. He understood; this was most likely a hidden clause between Kuaipao and Ali.

In this round of financing, Kuaipao must have offered Ali a very generous benefit in order to successfully persuade Ma Liyun.

For a moment, Wang Xin was extremely anxious.

Meituan's transaction volume in January was 4.7 million yuan, of which 6000 million yuan came from Juhuasuan.

Without this portion of revenue, Meituan may not even be able to achieve its 3 million yuan transaction volume target in February.

After all, February only has 28 days, and there are seven days off in the middle.

Wang Xin took a few deep breaths, and with no other choice, he dialed Lin Chenfeng's number in the Penguin Investment Department again.

"Is Mr. Wang planning to sell the company again?" Lin Chenfeng joked with a smile.

Last time, he decisively rejected Wang Xin.

Otherwise, they would end up like Ma Liyun, being tricked by Wang Xin.

“No, I want to talk to Mr. Ma about a collaboration to merge Meituan and QQ Group Buying,” Wang Xin said, surprising everyone.

He knew that conventional cooperation methods would not be enough to sway Ma Wenteng; only by going all in would there be a glimmer of hope.

In his view, although Tencent participated in Kuaipao's Series A and Series B financing, it has maintained the operation of QQ Group Buying, which shows that Ma Wenteng still covets offline consumption scenarios.

Lin Chenfeng was slightly taken aback and almost laughed out loud. There had long been complaints within the group about QQ Group Buying, Paipai.com and Yixun.com. They were too busy getting rid of these burdens to possibly acquire Meituan.

Even if it were offered as an equity payment, neither Ma Wenteng nor Tencent would necessarily be interested.

But then he thought that merging Meituan into QQ Group Buying might increase the product's valuation.

Therefore, after thinking for a moment, Lin Chenfeng did not rush to refuse, but slowly said, "President Wang, I will convey your proposal to Martin and Pony."

"Thank you, Mr. Lin," Wang Xin replied.

at the same time.

After hanging up the phone, Lin Chenfeng went straight to Liu Zhiping's office door and knocked.

"Come in," Liu Zhiping replied.

Lin Chenfeng then went inside, and after he sat down, he slowly said, "Brother Martin, Wang Xin from Meituan just called..."

“He wants to sell the company again? This man is fickle and not trustworthy.” Liu Zhiping interrupted Lin Chenfeng’s report.

"His desire to merge Meituan into QQ Group Buying and cooperate through equity payment is mostly driven by his desire to gain access to the traffic of WeChat and QQ."

Lin Chenfeng continued.

"Free? That's something I can try," Liu Zhiping replied after thinking for a moment.

Despite the seemingly good relationship between Tencent and Senlian Capital, when it comes to matters of personal interest, neither he nor Ma Wenteng hesitated to hand Chen Yansen a knife.

This has always been the nature of businessmen!
There's no such thing as loyalty or affection in this world!
People who can build a company worth tens of billions are unlikely to be virtuous.

If there is any, it's all an act.

“Come with me, let’s hear what Pony has to say first.” After saying that, Liu Zhiping led the way outside.

Lin Chenfeng followed behind.

Five minutes later, the two walked into Ma Wenteng's office.

"Merge with Meituan? It would certainly raise the value of QQ Group Buying, but who would be in charge of the business? Wang Xin?" Ma Wenteng frowned slightly and asked Liu Zhiping.

The current head of QQ Group Buying is Luo Xi, and the team consists of more than a thousand members, including remnants from Gaopeng.com and F-Group.

Because QQ Group Buying merged with Gaopeng.com and F-Group last year.

To put it bluntly, it's an alliance of the eliminated from the group-buying war.

With penguins by your side, you won't die, but you also won't succeed; you're just hanging on, half-dead.

Ma Wenteng originally wanted to pass QQ Group Buying on to Liu Qiangdong, but after Liu Qiangdong received funding from OTPP and Saudi Kingdom Capital, he immediately reneged on the agreement and tore up the intended cooperation agreement.

“Wang Xin isn’t one of Tencent’s own people,” Liu Zhiping replied indifferently.

The implication is that they're willing to take over Meituan, but only if Wang Xin is kicked out.

"Wang Xin would agree?" Ma Wenteng laughed.

He knew perfectly well that Wang Xin was just trying to take advantage of Tencent's mobile data resources.

Although the words sound nice, they can't hide the fact that the other party wants to 'marry a rich man'.

"Let Chenfeng give it a try, it won't hurt the group anyway," Liu Zhiping said dismissively.

If Wang Xin disagrees, then Tencent has no need to merge with Meituan.

Meituan is valued at only around $5 million, while Kuaipao is valued at $58 billion, with Tencent holding a 10.1% stake, worth nearly $6 million.

For Ma Wenteng and Liu Zhiping, the greatest strategic value of merging Meituan into QQ Group Buying was the corresponding increase in valuation, which would give them more bargaining power when selling the company to external parties in the future.

That afternoon, after receiving Lin Chenfeng's reply, Wang Xin felt utterly hopeless.

Ma Wenteng didn't give him a chance at all!
It wasn't hard for him to tell from Lin Chenfeng's tone that Tencent had no intention of cultivating a deep presence in the group-buying industry.

He wanted to use the penguins as a springboard, but the penguins wanted to use him as a stepping stone, and they weren't even willing to spend a penny.

Wang Xin wants to take over QQ Group Buying? Don't even think about it!
Facing reality, Wang Xin gave a bitter smile and could only grit his teeth and keep fighting against Kuaipao, Lashou, and Dianping.

at the same time.

Tens of thousands of Kuaipao delivery riders across the country gradually heard about the company's completion of its Series B financing.

The first batch of more than 5,000 deliverymen who joined Kuaipao generally had 2000 to 3000 stock options.

Only about 500 riders were officially hired in Q3 and Q4 of last year.

Based on the current price of $5.8 per share, the top performers among the first batch of KuaiRun riders have as many as 6000 options, with options profits alone exceeding 20 yuan.

In just one year, its value increased by over 100,000!
The turnover rate of delivery riders at Meituan and Qiandu Waimai has begun to skyrocket!
(End of this chapter)