Internet moguls are being held hostage by the entertainment system!

Chapter 229 ByteDance Series D Funding

After changing into a suit, Chen Xiu sat in the car and set off from Zhuozhou Film and Television City towards Beijing.

He returned to Beijing because Zhang Yiming had arranged to meet with him to discuss ByteDance's Series D financing and to discuss the investors to be introduced for Douyin's Series B financing.

In the former case, the two had already communicated online. Today, the main focus was on confirming the specific share and the scale of financing. There wasn't much else to discuss. The latter case was more important.

Douyin has developed rapidly and has long attracted the attention of the capital circle.

Shen Nanpeng and Lei Jun, among other big names, have expressed their desire to invest, and Liu Chiping of Tencent has also discussed Douyin with Chen Xiu more than once, making their investment intentions clear.

These are just Chen Xiu's network of contacts.

There's probably a group of people on Zhang Yiming's side waving banknotes and shouting "shut up and take my money!"

However, the amount of Series B funding is always limited, and with so many big names wanting to invest, choosing the right one is an art in itself.

Chen Xiu hadn't figured out this problem even after traveling from Zhuozhou to the capital.

It wasn't until he drove to ByteDance's new headquarters on Zhichun Road, Zhonghang Plaza, after the company moved from Yingdu, that he started to get a clue.

After sending Zhang Yiming a message downstairs confirming that her message had arrived, Chen Xiu took the elevator up to the floor where ByteDance was located and saw Zhang Yiming's assistant waiting at the door.

"Mr. Chen, please come with me."

"OK, thanks."

Chen Xiu followed behind her assistant and entered ByteDance's new office area.

To be honest, this place is indeed much larger than the Yingdu Building, and it better meets ByteDance's office needs after its business expansion.

Upon arriving at Zhang Yiming's office, the assistant knocked on the door before pushing it open and entering.

As Chen Xiu walked in, she scanned the office environment.

The conclusion is that this is an enlarged version of Zhang Yiming's office in Yingdu Building. The money tree is bigger, the desk is bigger, and there is a constantly moving Newton's pentagon on the desk. Everything else is pretty much the same.

The office owner, Zhang Yiming, sat on the sofa, with a document on the coffee table in front of him.

Sitting to his side was a round-faced man with glasses who looked gentle; he was Liang Rubo, the head of product development at ByteDance.

The assistant stood between Chen Xiu and the sofa and whispered to Zhang Yiming and Liang Rubo, "President Zhang, President Liang, President Chen is here!"

"Okay, you can go out now!"

The assistant, having finished his work, slowly left the office and gently closed the door behind him.

Chen Xiu glanced at the closed door before walking to the sofa opposite Zhang Yiming, bumping fists with Liang Rubo along the way.

"Old Liang, you seem to be having a pretty comfortable time lately!"

Liang Rubo pursed his lips, instantly understanding the implication of Chen Xiu's words.

"You mean I've gained weight, right?"

“I didn’t say it; it was Lao Zhang’s expression that conveyed it.”

Upon hearing this, Liang Rubo turned his head and saw Zhang Yiming suppressing a laugh. After the two looked at each other, Zhang Yiming waved his hand and denied it.

"I wasn't laughing at you! I was just thinking about something happy."

"..."

Liang Rubo rolled his eyes speechlessly, thinking to himself: You introverted guy, stop showing off your acting skills. The one with the better acting skills is sitting right across from you, and even his teasing sounds like he cares.

Chen Xiu watched the two interact with a smile, and similar scenes from the past flashed through her mind.

Liang Rubo, as Zhang Yiming's business partner, was also Chen Xiu's neighbor when they lived in Jinqiu Garden in the early days, but the two met less often than Zhang Yiming.

When Liang Rubo first started his business, he was so busy with work that he developed mild fatty liver. He often asked others to remind him about his weight and diet. Chen Xiu was most enthusiastic about this, and gradually it became a habit for him to talk about it.

Instead of small talk, jokes replaced pleasantries, and the three, who were already familiar with each other, became much more relaxed around each other.

After chatting for a while, Zhang Yiming brought up the reason why Liang Rubo was there: "The Series D financing is confirmed to take place next month. Rubo, why don't you introduce the company's new business?"

"Mr. Chen... I'm currently in charge of product development and new business expansion at ByteDance, so let me explain the situation to you."

"Ok."

Chen Xiuchao nodded to him and leaned forward slightly as a gesture.

Liang Rubo picked up the documents on the table, cleared his throat, and said, "Last year, based on Toutiao, the company developed Toutiao Video, which mainly produces high-quality medium-to-long videos..."

This Toutiao video is the predecessor of Xigua Video.

Chen Xiu thought to herself that the medium-to-long video direction that ByteDance chose for Xigua Video seemed to be different from the short video direction she originally remembered.

Thinking about Douyin's current situation, he gained some more insights.

In his previous life, Zhang Yiming's bets on the short video industry involved far more than just Douyin; multiple companies were involved, and Douyin was simply the one that had the last laugh.

Now, with its own guidance and support, Douyin's development speed far surpasses that of its predecessor.

At the beginning of this month, the number of users had already exceeded 100 million, with daily active users reaching 12 million, and Chen Xiu's personal account had also exceeded 10 million followers.

As the user base grows, Douyin's viral spread is beginning to take shape, with daily new app downloads increasing steadily. Based on the projected user growth chart, the user base is expected to exceed 2 million in the first quarter of next year.

This rapid development has given Douyin the qualifications to rival Kuaishou and compete for the top spot in the short video market. Seeing how well Douyin is doing in the short video arena, ByteDance naturally sees no need to waste resources trying to replicate its success.

On the contrary, medium and long video content is still lacking in ByteDance's structure. The emergence of Toutiao Video is presumably to make up for this shortcoming.

"...Besides Toutiao Video, the company's next development goal has been set overseas, and we are currently in talks to acquire BABE News Reading Platform in Southeast Asia."

Liang Rubo stopped and looked at Chen Xiu, indicating that he had finished speaking.

Chen Xiu nodded without changing his expression and said, "OK, so how much is the amount of this round of financing?"

"10 billion US dollars! The share to be sold is 10%, your original 4% share will be diluted to 3.6%. As previously agreed, your share this time is 2%, which is 2 million US dollars."

Upon hearing this number, Zhang Yiming pushed up his glasses with an envious look.

"You just liquidated your Didi shares. After deducting the $1 million spent on Douyin's Series A funding, your cash flow should still be quite sufficient, right?"

"So-so."

Chen Xiu shrugged and, based on this topic, mentally calculated where her funds would go.

When he left Didi last year, he cashed out half of his shares, which amounted to about $3 million. Of that, $1 million was used for Douyin, and most of the remaining money was transferred to Hong Kong to establish an investment company, where he bought shares in Apple and Tesla.

The money earned from A-shares, besides investing in Mobike and Pinduoduo, was also invested in several other internet companies, and the rest was invested in BYD and CATL.

Penguin's dividend payments essentially mean they continue to hold their stock.

In September of this year, Didi liquidated the remaining half and paid taxes. Of the $100 million raised, it was used for Douyin's Series A funding, and the remainder was used to pay ByteDance's 2% stake, which was more than enough.

Other things, such as acting fees and book publishing royalties... were too small and had been sitting in his bank account for a long time, so Chen Xiu hadn't paid much attention to them.

After reviewing the fund flows, Chen Xiu said to Zhang Yiming, "OK, I have no questions. Board seat?"

With this 2% acquisition, Chen Xiu's stake in ByteDance will reach 5.6%.

With more than 5% of the shares, one is eligible to join the board of directors, becoming a true member of ByteDance, which would allow for a closer cooperative relationship between the two parties.

Having fully witnessed the value of Douyin, Zhang Yiming was happy to see it happen: "No problem! You'll have to attend all the company's board meetings from now on."

Chen Xiu nodded silently, thinking that she had another task to complete.

Seeing that the first matter had been settled, Liang Rubo took the initiative to get up and say goodbye, leaving Zhang Yiming's office.

After he left, Zhang Yiming didn't bother with any preamble and went straight to the point: "I just let it slip that DST, IDG, and Temasek, these international venture capital firms, have all called me, saying they want to join Douyin's Series B funding round. What's the situation on your end?"

"I was wondering why I'd been getting so many calls from people talking about Douyin lately, but it turns out the conversations started with you!"

"Um... I'm just helping the company promote itself and attract investment!"

"..."

Chen Xiu responded with silence; if he hadn't controlled himself well, he would have rolled his eyes.

Zhang Yiming touched his nose and continued, "So, how many companies approached you for the Series B funding round?"

"Penguin, Sequoia, Hillhouse, Shunwei..."

Chen Xiu rattled off four well-known domestic venture capital firms in one breath, as if reciting a menu.

After discussing it, both sides realized that there were too many monks and not enough porridge.

In a Series B funding round, logically, only 10% of the shares are sold, and typically only 3 to 4 institutions participate in the investment.

If we say any more, everyone will be unhappy.

Chen Xiu looked up and met Zhang Yiming's gaze. They both read the same meaning in each other's eyes: who should they choose, and who should they reject?
Let me share my thoughts first.

"it is good."

Chen Xiu looked at Zhang Yiming and offered her suggestion: "I suggest that we give priority to investments from Tencent and Sequoia. What do you think?"

It goes without saying that Tencent was chosen, and Chen Xiu felt that Zhang Yiming would also accept Sequoia Capital, which was a funder of ByteDance's Series C and D rounds.

This combination is actually about finding a balance between the two people.

"The resources of these two companies are quite suitable for Douyin's current development needs, but since we plan to expand overseas next year, shouldn't we also consider international capital?"

"Of course! So how do you choose your investors?"

“Zhou Shouzi called me a few days ago and said that a partner from DST contacted him and said that they wanted to invest in Douyin. Under the same conditions, I think we should give priority to DST.”

When talking about Zhou Shouzi, Chen Xiu also thought of negotiating Didi's Series D financing with him two years ago.

This is indeed a talented person. Last year, Lei Jun poached him to become Xiaomi's CFO. Judging from Zhang Yiming's tone, they seem to have a very good relationship. Tsk tsk, that's really interesting.

“I have no objection. Let’s focus on these three for now, and try to continue contacting other institutions as well.”

"Okay, let's set our goals first, and then get in touch next year."

"We need to reserve the option pool for long-term employees in advance. Let's discuss it at the year-end meeting."

"OK, no problem."

(End of this chapter)