While LeEco is receding from its global expansion action plan due to the cash crunch that plagues the company, its sports content division ‘Lesports’ has secured a fresh round of funding. There is presently no word on who all have invested in this subsidiary, but the investors will now form an internal committee to ‘supervise’ the finances, reports Reuters.
The amount of capital pumped into the LeSports division of the Chinese company is also unknown at this very instant. But, it adds to the company’s existing pool of funds, which amounts to $1.35 billion, raised until date. The fundraising round has been closed at a valuation of $3.5 billion (or approx. 24 billion yuan), which is $200 million higher than the valuation it previously nabbed funds at.
The Series B fundraising round, which was led by HNA Capital (part of China’s HNA Group) had drummed up interest from nearly 30 investors. It also included participation from several celebrity investors, including Sun Honglei, Jia Nailiang, and Liu Tao. It was valued at $3.3 billion when it secured the said funding back in April 2016.
Prior to Series B, LeSports had secured $122.9 million in its Series A fundraising round, led by Wanda Group, along with Yunfeng Capital (backed by Alibaba Group) and seven other venture capital firms and individual investors. It has now onboarded a new set of investors, who’re keen to keep the subsidiary shielded from the ill-effects of LeEco’s ongoing cash crunch. An official statement on LeSports’ website states:
Investors, including HNA Capital, will form a new steering committee for strategic decisions, daily oversight and financial supervision.
LeSports, for those unaware, is an independently funded subsidiary of Chinese hardware manufacturer LeEco (seperated from the Letv brand back in 2014) and focuses mainly on the generation of sports-related media content. The company touts the proposition of combining events operations, streaming content, and smart devices with internet services as the unique aspect of its platform.
It will now further expedite its partnership and content generation process, thanks to the bulk of finances being in the company but will adopt a more balanced approach going forward. The subsidiary became title sponsor of the Beijing Wukesong Culture & Sports Center in 2016.
As for LeEco, we all must be aware that it is being faced with a massive capital crunch. The Chinese giant has been faced with this condition due to its ambitious goal of rapid global expansion coupled with back-to-back product release timeline. The company’s founder Jia Yueting then admitted that the company set sight on far-reaching goals and was doling out cash relentlessly. However, the company is currently doing damage control and has bagged fresh investments (from several investors in multiple rounds) to the tunes of around $6 billion to keep its ship afloat for some time.