Mere weeks after its launch in the United States, LeEco co-founder Jia Yueting had aired his concerns over the company’s intense cash crunch. Yueting then said that he would reduce his salary and pace of global expansion to focus on the growth of existing businesses. But, the Chinese tech behemoth has today announced that it has raised a whopping $600 million from a cohort of a dozen investors.
This funding round, which will support the company’s growth, saw participation from investors including apparel maker Heilan Group, Hong Kong-listed furniture company Man Wah Holdings and Shandong-based pharmaceutical firm Luye Group, reports Forbes. There is currently no clarity on where the company plans to employ this humongous inflow of capital
The official statement states that the funding capital will be delivered to LeEco in multiple tranches, with the first one being delivered by the end of this month. The $300 million which the Chinese giant will receive in the first tranche will be used to support the company’s global and electric car business. There is currently no clarity on how the company plans to employ the second tranche of the humongous capital.
Commenting on the funding round, Hank Liu Hong, co-founder and vice chairman of LeEco says,
Although there are doubts surrounding LeEco, true innovative entrepreneurs can see the investment value of LeEco and its enormous growth potential in the future.
LeEco is undergoing a series of strategic and organizational upgrades as it enters the second phase of its strategy, where the focus shifted from aggressive expansion to positive and sustainable growth and acquisition of high value user.
For those unaware, LeEco is a Chinese technology and internet giant which after exploring opportunities in its home market has expanded to global markets, especially India. The company recently also stepped foot in the United States with the launch of a string of smartphones, smart televisions and the vision to complete its EV project — the LeSEE. India is considered to be company’s biggest market outside China.
This announcement which allows the Chinese tech behemoth to breathe a sigh of relief comes on the heels of the capital crunch. Though LeEco had recently secured a whopping $1.08 billion to build its electric car, Yeuting last week said that the company might curtail the development of the electric car to save funds. He had also annoucned that he would pump in an additional $10 million into the company to streamline operations.
In addition to funding, LeEco has also introduced a change in the higher ranks of the company. It has today announced that Anthony Gao, who’ll report directly to Jia, has been appointed as the new president of LeEco Asia-Pacific region. He will be replacing Tin Mok and his resposibilities of operational management and meeting various business targets.
After a 17 year long stint at rival Chinese tech behemoth Huawei, Gao joined LeEco in September this year. He was appointed to lead the VR and AR efforts of the company along side its open smart hardware initiative ‘Made for LeEco’. Gao will also beceme the chief executive of Hong Kong region, said LeEco in the official statement.