Rebirth 08: Can a mobile game company also build a tech empire?

Chapter 126 Financing Begins

"Ten percent, an 8 billion valuation, that's 800 million RMB."

Lu Chen did the math.

"Eight hundred million RMB, which is about 110 million USD, is not a small amount for an initial round of financing."

"That's why we need to find top-tier investment institutions."

Lin Bing said.

"Most venture capital firms simply can't handle this level of scale, and what we need is not just money, but also resources. Top-tier institutions can bring much more than just capital."

Lu Chen nodded.

"Then let's proceed with this goal: 10% of the shares, 800 million RMB. Let's first contact those leading institutions with strength and resources."

Lin Bing listed a series of names.

The two pages of A4 paper were filled with dense writing.

And it certainly carries a lot of weight.

Sequoia Capital, led by Neil Shen, has invested in companies like Alibaba and Sina, demonstrating its keen investment acumen.

IDG, one of the earliest international venture capital firms to enter China, has invested in companies such as Baidu, Tencent, and Ctrip.

SoftBank, which previously invested in Shanda Interactive Entertainment, has extensive resources in the gaming industry.

Today Capital, Xu Xin's team, specializes in consumer goods and the internet, and has invested in JD.com.

Lenovo Capital, backed by Lenovo Group, has a natural advantage in the hardware industry chain.

That's all.

Lin Bing pointed to the investment institutions on the list.

"Let's contact these companies first and see their attitude."

Lu Chen nodded.

"Then proceed with this list. Have Susie prepare the materials, and we'll begin formal contact next week."

Monday, June 20th.

The news that ZhengTu Communications has launched a financing round.

It was Lin Bing who secretly released it through several channels.

There was no fanfare.

It only circulated within a small circle of a few core investors.

But the news spread at an astonishing speed.

"I heard the company that made Journey 1 is looking for funding?"

"Zhengtu Technology? That's the domestic mobile phone brand that sold out?"

"Yes, the valuation is quite high, it's eight billion."

"Eight billion? Are you crazy? A month's revenue of nine hundred million and you dare to ask for an eight billion valuation?"

"They have the capability; 450,000 units sold in the first month—that's a strong figure anywhere."

By Tuesday morning, Lu Chen's phone started ringing.

The first call came from an unknown number.

He claims to be a partner of a second-tier fund.

His tone was warm, like that of an old friend.

"Mr. Lu, I heard that your company is raising funds?"

Our fund is very optimistic about ZT Technology and would like to schedule a time to discuss it further. Would that be convenient?

Lu Chen politely replied with a few words and then hung up the phone.

Before I could even put down my phone, another call came in.

Then came the third, the fourth —

Lu Chen received more than a dozen phone calls that morning.

It was full of people from various investment institutions.

Some are well-known funds, while others are completely unknown to me.

Some were sincere, while others immediately asked if the valuation could be discounted.

The situation with Lin Bing is even more exaggerated.

His network of contacts at Microsoft and Google.

At this moment, they have all become channels for investment institutions to come knocking on their door.

Former colleagues and business partners.

Even colleagues I've only met a few times.

They all tried to contact him through various means, hoping to get in touch.

"Mr. Lu, my phone is ringing off the hook."

Lin Bing pushed the door open and came in.

Holding a constantly vibrating phone in my hand.

He smiled wryly.

"I've scheduled a meeting with Sequoia Capital for the day after tomorrow, SoftBank for Friday, and a few other second-tier firms, but I've put them on hold for now."

Lu Chen leaned back in his chair.

Looking at the countless missed calls on my phone screen.

He let out a soft breath.

"This is just the beginning."

After that, the situation escalated further.

The front desk of ZhengTu Technology was overwhelmed by the constant stream of visitors.

Someone came directly to my door with their business card, saying they wanted to visit Mr. Lu.

Someone used their connections to find a company employee and hopes to get an introduction.

Some people even waited in the coffee shop downstairs for Lu Chen to get off work.

The next three days.

The reception area and meeting rooms at ZhengTu Technology are almost always occupied.

The Sequoia people have arrived.

We chatted for two hours, and just as I saw them off, the people from Kleiner Perkins Caufield & Byers arrived.

Before Kleiner Perkins Caufield & Byers had even finished their negotiations, SoftBank representatives were already waiting outside.

Partners, vice presidents, and investment managers from various institutions took turns appearing on stage.

The materials they brought filled a corner of Lu Chen's office.

Someone brought a thick investigation report.

Someone brought a meticulously prepared cooperation plan.

The person brought a letter of intent directly, just waiting to be signed.

Lu Chen and Lin Bing meet with people from morning till night every day.

My voice is almost hoarse from talking.

"How many companies have you met with so far?"

On the fourth day at noon, Lu Chen leaned back on the sofa and asked Lin Bing.

Lin Bing flipped through the records.

"Including today, there are a total of twenty-seven."

"Anyone interested?"

"Twenty-one companies."

Lin Bing pushed up her glasses.

"But there are only seven or eight companies that truly have the financial strength to take over this round of financing."

Lu Chen nodded.

These past few days have been spent getting to know each other.

He already knew what was going on.

Lin Bing held the list.

We began to sort them out one by one.

"Sequoia Capital's intentions are clear. They are willing to accept a valuation in the range of six to seven billion, but they require a board seat and a veto right."

"SoftBank is very proactive. They have given a valuation ceiling of 7.5 billion, but they hope we can open up some business data so they can conduct a more in-depth investigation."

"Mr. Kuang from Qiming Venture Partners came twice in person, showing great sincerity. However, their funding is limited and they may not be able to handle such a large share. They will need to collaborate with other institutions."

"Lenovo Investment, backed by Lenovo Group, can bring us supply chain resources, but they hope to have some synergy with Lenovo's mobile phone business, which may affect our independence."

Lin Bing explained each point one by one.

Lu Chen listened to each of the reports one by one.

After Lin Bing finished speaking, Lu Chen suddenly asked a question.

What about IDG?

I remember their names were on the list. Have you been in contact with them these past few days?

Lin Bing paused for a moment, flipped through the records, and frowned slightly.

"no."

"No?"

"No, there really isn't."

Lin Bing checked it again.

"Sequoia Capital, SoftBank, Qiming Venture Partners, Morningside Venture Capital, and Kleiner Perkins Caufield & Byers all came, but IDG has never contacted us. They haven't called or come."

Lu Chen leaned back in his chair, seemingly lost in thought.

IDG, Xiong Xiaoge.

The name lingered in his mind.

As someone who has been reborn, he is all too aware of the weight of this godfather of Chinese venture capital.

Xiaoge Xiong, Founding Partner of IDG Capital.

In 1993, he brought IDG to China, pioneering venture capital in the country.

In 1997, he joined Sohu.

In 1999, he invested in Tencent.

In 2000, he invested in Baidu.

Any one of these three names can be chosen.

These are all legends in the history of the Chinese Internet.

Sohu ushered in the era of portals in China.