Stronger by Paying Salaries and I Have 1 Billion Employees

Chapter 133: Chapter 123: A 16 Billion Valuation, a Sucker Comes Knocking

The next morning, as soon as Chen Yansen arrived at the Innovation Park, he called Lin Chenfeng from the Penguin Investment Department, Zhang Suyang from the IDG Venture Capital Fund, and Zhang Jiancheng from Siwei Capital.

Chen Yansen’s message was blunt: he was selling a 5% stake in FoxTao.

”President Chen, I’ll communicate with Martin first and get back to you when I have an update.” Lin Chenfeng’s implication was that he needed to go ask Liu Zhiping for instructions on whether to accept the 5% stake.

Zhang Suyang and Zhang Jiancheng gave similar replies. They were both quite interested in the 5% stake, but they would need to re-evaluate FoxTao’s current business scale to determine a purchase price.

Chen Yansen didn’t think much of it. He was just going through the motions of notifying them; the news was bound to get out one way or another.

By noon that day, various domestic venture capital firms with a passion for the e-commerce sector began to receive tips from the grapevine.

The founder of FoxTao intended to sell a 5% stake. As soon as this news broke, it immediately attracted a great deal of attention.

In the field of shopping guide e-commerce, FoxTao was in a league of its own.

It left Meili Shuo, Mogujie, and What’s Worth Buying far behind, leaving them to fight for the scraps.

Furthermore, it had completed 1.5 billion in sales in the first quarter (actually 1.29 billion) and set an annual sales target of 10 billion. Once achieved, its sales and profitability would be second only to Ah Li and Jingdong in the country, even surpassing Yihaodian and Dangdang Network.

As a result, interested venture capital firms began making offers one after another.

Using the user value valuation method, FoxTao currently had 3 million daily active users. With each active user estimated to generate 500-1000 yuan in profit, its valuation ranged from 1.5 to 3 billion.

But FoxTao’s valuation had already reached 2.8 billion during its Series A financing. So, for any VC that offered a valuation below 3 billion, Chen Yansen simply hung up on them.

After all, these people were making thoughtless offers, and Chen Yansen didn’t expect them to come back with more sincere terms.

If using the price-to-sales ratio valuation method, based on the current daily sales of 30 million, the projected annual sales would be 10 billion. With the e-commerce industry’s average P/S ratio of 1.5-2x, the valuation would be between 15 and 20 billion.

However, there was still a difference between a shopping guide platform and a true comprehensive e-commerce platform.

Although most VCs were optimistic about FoxTao’s development, they also felt its ceiling wasn’t very high.

The highest valuation they offered was 10 billion!

Even stingier venture capital firms used the traditional discounted cash flow method for the industry, offering a valuation of 7.2 billion.

Chen Yansen, however, wanted to use the price-to-earnings ratio valuation method. He figured that with an average P/E of 20 and an annual profit of 600 million, a valuation of 12 billion from the VCs would be reasonable.

But regardless of which calculation logic or valuation model was used, the valuation exceeded 6 billion, proving that FoxTao already possessed the strength of a unicorn company.

Chen Yansen and the VCs sounded each other out.

A week later, the truly interested venture capital firms gradually emerged: Redwood Capital, IDG Venture Capital Fund, and Augusta Capital.

Among them, Augusta showed the most interest, and their offer was the most sincere!

They had originally been examining the business model of Ebates (the progenitor of the cashback business) and were preparing to invest when they learned that an even more rapidly developing shopping guide e-commerce platform had appeared in the Asian market.

Established for less than a year, its estimated annual sales exceeded 1.5 billion US dollars.

This instantly piqued their interest!

So, after investing 40 million US dollars in Ebates, the people from Augusta rushed to Huian without stopping, transferred to a high-speed train, and headed straight for Xuyuan.

Upon receiving the news, Chen Yansen smiled faintly and thought, ’It seems the investment firms from the Light Country are more straightforward after all.’

’Perhaps because they’ve had contact with Ebates, they’re more familiar with and trusting of this type of business.’

Chen Yansen knew in his heart that unless he could get FoxTao listed on the Nasdaq within two years, any investment, no matter who it came from, was destined to be a losing deal.

After some deliberation, Penguin decided that FoxTao’s valuation was inflated and the returns from a follow-up investment wouldn’t be high, so they were the first to back out.

Siwei Capital was in a similar situation. They weren’t a large firm and preferred high-risk, high-reward gambles. Deciding it wasn’t a good deal, they also gave up their purchasing rights.

Ma Liyun of Ah Li was very interested, but the funds he had on hand were needed to buy back the 40% stake from Yahoo. His hands were tied, so he also gave up.

「May 9th, 1:00 PM.」

On the ground floor of the Innovation Park, Chen Yansen met Augusta’s investment team. Aside from a Chinese translator, they were all from the Lighthouse Country, which suggested that Augusta Capital had not established an office in Asia.

The fact that they were willing to invest was likely because they were extremely optimistic about the future development of the shopping guide model.

But Chen Yansen knew clearly, ’The shopping guide model has no future!’

”President Chen, this is Jody, the investment manager from Augusta. He was in charge of the 40 million US Dollar financing deal for Ebates.”

The translator said politely, pointing to the middle-aged white man beside him.

”Hello, Mr. Chen, I’m Jody. It’s really hard to imagine that the founder of FoxTao is so young.”

Jody, who had a receding hairline and was dressed in a custom-made royal blue suit, enthusiastically extended his right hand in greeting.

The translator was just about to translate Jody’s words for Chen Yansen.

But Chen Yansen walked straight up, shook Jody’s hand, first sizing up the ’big sucker,’ then fluently exchanged pleasantries with him in English and invited him upstairs for a tour.

The translator froze for a moment, then was secretly delighted. ’Anyway, this bunch of foreign devils have already paid. I can get paid for doing nothing. Fucking awesome.’

Jody was very surprised. He hadn’t expected Chen Yansen’s English to be so good—a pure American accent without the slightest trace of a foreign one.

Chen Yansen led Jody and the others to the second floor, and the first person to be completely dumbfounded was Wang Zihao.

He knew Chen Yansen all too well. An 80 on his college entrance exam for English, he was practically the most ”patriotic” student in the third-year Class 8—he guessed all the vocabulary and winged it on the listening comprehension.

’Is this person chatting so easily with a foreigner really Chen Yansen?’

Wang Zihao was filled with questions.

He had indeed often seen Chen Yansen reading books and watching original-language movies, but this level of improvement was just too exaggerated.

Augusta’s entourage included investment analysts, industry experts, and financial and legal advisors.

Once everyone was seated, Jody got straight to the point and asked Chen Yansen for the balance sheet, income statement, cash flow statement, and user and sales data.

Seeing that the other party was eager to discuss the partnership, Chen Yansen didn’t mind. He had Hu Yun distribute the prepared materials to Augusta’s staff.

Then, Hu Yun connected to the projector screen and opened the data report.

Hu Yun then looked at the translator, signaling for him to help with the presentation. The data was mainly in Arabic numerals and diagrams, which the foreigners could understand, but the fields and headers were in Chinese and required the translator’s assistance.

The translator nodded and began to present FoxTao’s current development status in coordination with Hu Yun.

million daily active users!

million in daily sales!

Nearly one million new customers per day!

Projected annual sales of 10 billion, with a net profit of 600-700 million!

To be honest, FoxTao’s growth was no worse than Ebates’.

Jody considered Hua Country’s population of 1.4 billion and its enormous e-commerce potential, and his intention to invest was instantly solidified.

Before coming to Hua Country, Jody’s team had already analyzed information such as the shopping guide market’s size, growth rate, market share, and competitors. FoxTao was firmly at the top of the industry.

During the conversation, Chen Yansen also proposed the concept of a cashback card. In the future, FoxTao users could get cashback whether they were shopping in offline supermarkets or on online B2C platforms.

A credit card combined with a cashback model, extending from online to offline.

Chen Yansen was skilled at painting a pretty picture. His words made the balding foreigner’s eyes light up, suddenly feeling that Hua Country’s shopping guide e-commerce sector had enormous potential.

Just the idea of combining credit cards with supermarket cashback, if brought back to his home country, represented a market worth tens of billions.

Chen Yansen laughed inwardly. ’I didn’t expect him to take it so seriously when I just mentioned it offhandedly.’

In reality, these small tricks for market expansion would all be attempted by others in the future, but they would fail to take off due to their small scale.

For example, buying a certain brand of shampoo at a supermarket and uploading the receipt to get an advertising rebate from the brand was both troublesome and easy to fake, making it impossible to implement on a large scale.

Chen Yansen was just bluffing. He had no intention of implementing these immature business plans; they were just empty promises he made while painting a picture of FoxTao’s future.

Jody’s team stayed at the Innovation Park until 6:00 PM. Before leaving, they took a stack of data files with them.

”Brother Sen, when did your English get so good?” Wang Zihao sidled up and asked curiously.

”I learned it in my spare time,” Chen Yansen replied perfunctorily with a smile.

’Now I just have to see if Redwood Capital and IDG can offer a higher price.’

Zuo Hongyu was helping him find a factory in Shencheng City, and Xu Dan had even finished the recruitment plan. They were all waiting for the funds to be secured.

「Three days later.」

After a comprehensive evaluation, Chen Yansen gave up on Redwood Capital and IDG, choosing to partner with Augusta instead.

They had offered too much!

A 16-billion valuation! Chen Yansen’s 5% stake would net him 800 million!

If Chen Yansen, as the major shareholder, hadn’t restricted the rights of IDG, Penguin, and Siwei Capital to transfer their shares, Siwei would have probably been the first to jump at the chance to sell all of its shares to Augusta.

After all, they could make several hundred million from the sale.

When the news got out, it sent huge waves through the industry. No one had expected that some filthy rich whale from the Lighthouse Country would be willing to offer such a high price.

With a net worth in the tens of billions, Chen Yansen shot to the top of the ”Post-90s Rich List.” Some of his fans believed that the others on the list, with net worths of a mere billion or so, weren’t even qualified to be his stepping stool.

Someone went so far as to create a ”Global Post-90s Rich List,” ranking Chen Yansen alongside Facebook’s Zuckerberg. The list was absurdly unofficial, but quite a few people still believed it.

Some even questioned whether Zuckerberg, not being born in the 90s, was even qualified to be on the list.

Chen Yansen didn’t know whether to laugh or cry when he found out. However, seeing his Weibo follower count explode and head toward the ten million mark, he kept quiet and just silently posted handsome photos of himself and previews for brand collaborations.

This completely blocked off Chen Ou’s path. He had just secured 10 million US Dollars in financing, but in terms of looks and ability, he couldn’t compare to Chen Yansen. If he were to truly go down the path of an influencer-entrepreneur, he would most likely be ridiculed.

In mid-May, with Chen Yansen’s push, the development of the Aurora System was more than halfway complete.

At the same time, Xu Dan began recruiting hardware design and industrial design engineers, and gradually transferred the employee contracts of the Aurora Research and Development Team to the newly established Orange Technology.

Meanwhile, Jingdong secured the largest round of venture capital funding in its history. Liu Qiangdong’s heavy-asset model had won the favor of Digital Sky Technology, Tiger Fund, and Redwood Capital, bringing in 1.5 billion US Dollars.

This allowed Liu Qiangdong to launch his first major assault on Ah Li’s position as the hegemon of e-commerce.