2003: Starting with Foreign Trade

Chapter 780, Episode 778: Little Ma's Massive Bleeding
Successful entrepreneurs have boundless energy. After having a meal and taking a short rest, the two continued to discuss the financing of the express car with Li Weixin and Lü Chuanwei.

Lü Chuanwei is indeed better at running a ride-hailing service than Chen Weixin.

The plan he brought was very detailed, from promotion to formal operation, including the establishment of partners. He also mentioned the crucial matter of getting things done with the traffic management department.

In addition, the original plan to integrate with Alipay and become an app for Alipay online payment of taxi fares has been changed to WX Pay online payment.

In addition, plans have been made for precise starting point positioning, real-time distance tracking, intelligent push mechanisms, user points levels, and VIP functions.

"We plan to launch the Kuaidi APP in 30 cities by June next year, with over 6 million downloads and 20 drivers by the third quarter. Then we can proceed with the next phase of our subsidy program."

"Our first step is to capture more than 40% of the national market share."

Lu Chuanwei has big ambitions. He wanted to capture more than 40% of the national market share within a year. But that's normal. No internet company wants to create a monopoly.

A 40% share is the first step, and indeed it must be the first step.

Otherwise, there would be no need to bring in giants like Tencent and Alibaba; a few ordinary investment institutions would suffice.

"This is a very large market, a little money won't be enough. Is the $1500 million you're asking for enough?"

Pony Ma and Lei Jun's eyes lit up as they listened. The plan to unify the ride-hailing market across the country would result in an unpredictable daily transaction volume. Even a 40% market share would be incredible.

If we can really get through this, then WX Pay will have a very wide range of applications.

The most important thing about payment is the application scenario.

"It's indeed not enough, but we still have some money on hand. $1500 million is enough to support our initial plans. And it should be noted that our app will basically be burning money for the first three years."

This is actually a Series B funding round. Tan Jincheng has invested tens of millions of US dollars in the express car project, and the funds should be sufficient to support the project until the beginning of next year. The main purpose of this funding round is to introduce a payment app.

Money is a small matter.

Having two or three thousand US dollars in cash reserves should be enough to support a year's worth of spending spree.

"In addition, to cope with the regulations, we also set up a car rental company. Mr. Tan provided us with 1000 new energy vehicles. We can also get more taxis of our own in the future. On the one hand, it solves the regulatory problem, and on the other hand, it can open up a second market."

Administrative efficiency is often slow. The ban on individuals driving taxis is unlikely to change for at least four or five years, or even ever. Just like with payment licenses, the best approach is to get started first.

However, if you have a car rental company, although you still can't avoid violations, it's generally easier to talk to the traffic management department.

Lei Jun nodded: "Understood. Also, if there are any issues that require networking, remember to contact us promptly."

Compared to Tencent's business model, he is a hardware developer and can better understand the behavior of ride-hailing services. They can indeed help out; Lei Jun can help smooth things over with traffic management departments in Beijing and Hubei Province.

Little Ma needs no introduction, Nanshan is an invincible team, and Tan Jincheng needs no further explanation.

With this approach, several parties collaborated simultaneously, and the problems in several major cities were largely resolved; of course, the most important factor was the Ministry of Transport.

But there's no rush. Nobody will bother you until you've grown big enough.

"So, what should we do with these 1000 vehicles, Mr. Tan? Should we pay him directly, or what?"

Pony Ma's reaction was quick; the cost of 1000 vehicles is not low, and giving money directly might affect the cash flow of a startup.

"Our plan is to convert these 1000 cars into our investment share. In addition, our main approach in the future will be to gradually dispose of these taxis through leasing, reselling them as second-hand vehicles, or signing agreements."

Car rental companies are a capital-intensive industry, while Express Car Rental follows a capital-light model. The current establishment of a rental company is merely to solve some of the problems, and Express Car Rental has no intention of taking the capital-intensive route.

At this stage, the main purpose of doing these things is to add a concept to the company; these things will definitely be dealt with later.

"No rush, I'll figure out a way for you to handle this later."

Heavy assets are indeed not suitable for the ride-hailing model of express cars. Didi has a future of premium cars and even had the idea of ​​manufacturing cars. A brand of new energy vehicles was established, but in the end, none of them came to fruition.

It's not that it can't be done; the car rental market is a huge market worth hundreds of billions. It's just that this is none of Tan Jincheng's business.

After this round of financing, once Tencent sees the benefits, it will likely gradually take over the investment in Express Car, letting Pony Ma burn money while Tencent just waits to collect the profits.

"Okay, it's settled then, 1500 million US dollars. How much does Mr. Lei want?"

Lei Jun holds a very high position in the internet industry. Although it was a follow-on investment, Pony Ma still had to show him respect.

"I'll take the $300 million share; it's all about participation."

Lei Jun was in a good mood. After six or seven hours of debate, the two sides reached an agreement on the merger of MiTalk and WX. Pony Ma's offer was really hard to refuse.

Tencent will acquire MiTalk for a valuation of US$25 billion, of which US$20 billion will be in cash and the remaining US$5 million will be paid in stock.

This price is definitely advantageous for Xiaomi. With $20 billion in cash reserves, Xiaomi can avoid several rounds of financing.

In addition, regarding the valuation and payment method, Pony Ma (Ma Huateng, Tencent's founder) has shown great sincerity. With only one-sixth of WX's users, he gave WX a valuation of 20%. Of course, this transaction is a good thing for both Tencent and WX.

Tencent has now unified the IM software market, and the remaining domestic competitors are no longer a threat.

This is a win-win, or even multi-win, deal.

If the merger of MiTalk and WX hadn't been agreed upon beforehand, Lei Jun might have asked for more shares in the follow-on investment, but now, just showing up is enough.

"Alright, then I'll take the $1200 million share. Also, can I buy the share that Mr. Tan has converted into? How about I buy it for a premium of 7000 million yuan?"

The business acumen of top business leaders is indeed undeniable. Express is a money-burning project, and Lei Jun's casual participation without wanting to play it is because they also need a lot of money to make hardware, not because they look down on the project.

Like Tan Jincheng, Lei Jun's main purpose in investing, besides making money, is to strategically position himself within his own industries, and also to network.

Lei Jun has another investment principle: he only invests in companies recommended by friends or through referrals, such as express car services. If Chen Weixin had approached him directly, he probably wouldn't have invested.

"Uh, Mr. Ma is very generous. I have no problem with it. As long as Mr. Chen and Mr. Lü agree, that's fine."

This time, they plan to give away 15% of their shares. If it were converted into shares, Tencent wouldn't get many at all. In order to get more shares, Pony Ma chose to directly pay for these 1000 cars.

Anyway, he's rich and powerful; he's already spent $1200 million, and he's even willing to give $20 billion, so he doesn't care about this $7000 million.

Tan Jincheng doesn't care about the shares in Kuaiche. His main goal is to promote his new energy vehicles. These 1000 vehicles were given to Kuaiche at a discounted price. If Pony Ma doesn't mention it, this will remain a bad debt until at least the next round of financing.

If converted into shares, he doesn't actually need that much. He already has enough shares, so he might as well give Weilai Group more cash.

Converting the shares and getting Tencent and Ali to enter the market faster, allowing more ordinary people to participate in the ride-hailing industry, would be most beneficial for the promotion of new energy vehicles.

Capital has its demands, and so does he.

That's selling cars! Selling cars! Selling cars!
"Haha, President Tan is so generous in supporting us, so we certainly have nothing to say."

Chen Weixin and Lü Chuanwei were completely convinced. The vision was truly grand. This was only the Series B funding round, far from the harvest season. The significant support given to Kuaiche in the early stages was not yet ready to yield results.

There is absolutely no need for President Tan to give up his shares for this 7000 million yuan in cash; it's simply a concession for the development of the express car service.

If they just give money directly, it will be easier to handle the shares. If 15% of the shares are sold, and ByteDance does not participate in the investment, then 3% will be diluted accordingly, and the shareholding will drop to 17%, while Tencent's shareholding will rise to 15%, and Lei Jun's Shunwei Capital will hold 3%.

After the four parties finalized the agreement, Tan Jincheng called over a lawyer to draft it. After each party checked the agreement and found no problems, they all signed it.

Chen Weixin's hand trembled slightly when he signed the document. Kuaizhi had been established for less than a year, yet it had already raised tens of millions of US dollars and owned fixed assets of 1000 cars.

"Those old guys at Fancheng are so short-sighted. They're satisfied with making a few hundred million from just one game."

That's the allure of capital. After coming into contact with capital, Chen Weixin, who was initially conflicted about losing his position as CEO of Fancheng, now completely disregards the annual revenue of one or two hundred million yuan.

After this round of financing, Kuaizhi's valuation is close to 5 million, and that's in less than a year.

"You two shouldn't be too high-profile. After we get the money, let's keep a low profile and seize territory. We'll see how you perform over the next year."

Almost every major city has ride-hailing apps, and Beijing alone has several. To capture the market in major cities, in addition to increasing investment, the most important thing is to exploit information gaps and catch competitors off guard.

"Haha, I understand. Mr. Tan likes to make a fortune quietly, we know that."

"Also, you need to find someone who understands grassroots psychology to assist you. Your two methods are too orthodox. Look at this promotion in Hangzhou, it would have been difficult to open up the market using the orthodox methods."

Chen Wei's grassroots experience allowed him to seize a significant portion of his competitors' market share through various unconventional tactics in subsequent competitions.

This applies to Wang Xin as well. In business competition, unconventional tactics can sometimes be very useful; being overly serious won't get you anywhere.

Lei Jun also agreed with Tan Jincheng's statement and echoed it.

Pony Ma is no exception; how many questionable moves has Tencent made?
The opportunity to learn from three business leaders is rare. Although Chen Weixin has his own reputation, it pales in comparison to the three leaders. He can only fool people.

At this point, Chen Weixin and Lü Chuanwei had already learned that WX and MiTalk were about to merge.

"It's truly unbelievable. I never expected President Tan to pull off such a grand gesture." After leaving the villa, Chen Weixin lit a cigarette and took a deep drag as he stood by the roadside.

They declined Lai Yiu-fai's offer to take them, deciding instead to enjoy the night in Beicang. They had been in Beicang for several days, but Chen Weixin hadn't gone out yet.

"It's indeed a big move. To be able to bring about a merger between the number one and number two in the IM software market, Mr. Tan's ability is truly undeniable; but this is also good, as it allows us to keep a more low profile."

Compared to the financing of Express, the merger of WX and MiTalk is the biggest news.

"That's right, but we don't know the exact amount. However, Mr. Ma really went all out today."

"Haha, Mr. Ma must have given up this blood willingly; let's go, this isn't what we're concerned about. I heard from someone that there's a pretty good late-night snack place around here, let's go grab a bite."

Despite the massive blood loss, Mr. Ma was indeed beaming. Tan Jincheng had originally intended to ask Lei Jun how much he had spent.

As a result, he got drunk by the two of them and didn't wake up until the next day.

Little Ma has left, but Lei Jun is staying for the time being.

"25 billion US dollars? Holy crap, that's pretty generous."

Early in the morning, Tan Jincheng didn't want his family to make breakfast, so he took Lei Bus to a breakfast shop near the neighborhood. He usually went there quite often and knew Lei Bus well.

"These wontons are pretty good. They have thin wrappers and lots of filling. Adding some seaweed and dried shrimp makes them quite delicious."

Having a bowl of wontons after a hangover feels really good.

"Boss, give me another bowl."

After quickly finishing his bowl, Lei Bus asked the owner for another bowl before saying to Tan Jincheng, "That's right. Besides the good pay, Mr. Ma also provided a lot of conveniences."

Xiaomi's 1999 yuan strategy has taken away too many people's profits. Coupled with Lei Jun's monkey-like scarcity marketing, Xiaomi has been able to sell well, but its reputation is really bad.

Actually, the quality of Xiaomi phones in this life has improved a lot thanks to Tan Jincheng's several suggestions. Although the Xiaomi 1 also overheats, it's not as bad as it was in the previous life.

The problem of mobile phone overheating has always been difficult to solve, and even after more than 10 years, many mobile phones still suffer from severe overheating.

Catching Xiaomi haters does damage Xiaomi's brand image, but Lei Jun currently has no media resources, so he has no other choice.

Although Lei Jun was very famous in 2012, he had not yet established his own foundation.

Partnering with Tencent could be a way for Xiaomi to rehabilitate its brand image.

"Haha, although Tencent acts domineeringly, it is indeed willing to invest resources if it supports you. Since Pony Ma has agreed, it is a good thing for Xiaomi."

Lei Jun also strongly agrees with this point, noting that Tencent's investment approach has changed and become more flexible.

Even before the changes, Tencent was very generous to the companies it invested in, providing them with money and traffic as needed, offering very strong support.

As an entrepreneur, I have mixed feelings about Tencent, but overall I like it more.

That's way too much.

Orange Technology's smooth early development was largely due to its timely cooperation with Tencent. Otherwise, if Happy Farm really wanted to take over Orange Technology in a domineering way, Tan Jincheng really wouldn't have had a good way to deal with it.

"I hope Mr. Ma will keep his promise."

Although they received Tencent's stock, the merger of MiTalk and WX was essentially a one-off deal. In essence, the two businesses had little connection, and Tencent's media endorsements could not be written into the contract.

"Don't worry, it won't do him any harm. He's willing to spend so much money on you, so he's not short of resources."

This was Pony Ma's first visit to Ningbo. In just over a day, he spent more than 20 billion US dollars, and in that short time, the news on the internet had already spread significantly.

Reporters were stationed at the headquarters buildings of Flashpoint and Orange Technology, but unfortunately they didn't get to see anything. Tan Jincheng has been discussing business at home these past few days.

Meanwhile, Little Ma had already returned to Shenzhen.

None of the three companies have responded yet, mainly because they don't know how to respond. So far, including Gu Qingqing, only six people know about this matter.

Pony Ma was in a hurry to go back and discuss things with the board of directors, and so was Lei Jun. After having breakfast, he was also leaving.

"I can't comment here, but you two should make a big fuss when you get back. This will benefit both of you, and it will also make the carpooling financing more low-key."

The combined payment systems of WX, MiTalk, and Orange Pay cannot compete with Alipay. If Jack Ma were to react quickly, he would definitely find another investor to enter the market as soon as possible.

The most likely candidate is Didi.

If Ali had put in all his effort, he could have propelled Express to the top of the market share in the previous timeline. If Didi had received a significant and rapid investment, coupled with Chen Wei's capabilities, Didi might have been able to surpass Express in this lifetime and seize the top market share.

What we need to do now is exploit the time difference; time is absolutely crucial for internet companies.

"Okay, I understand. Thank you this time. Without your plans, MiTalk wouldn't have achieved what it has today, and it wouldn't have made so much money."

$25 billion! That's almost half the value of Xiaomi, and it's in cash.

After waking up this morning, Lei Jun carefully reviewed the situation. If it weren't for Tan Jincheng's series of plans, according to their original development plan, MiTalk would have already failed when features like "People Nearby," "Shake," and "Moments" emerged.

It can only last until May of this year at most. What value does a failed product have?

He even suggested spinning off MiTalk, and the independent MiTalk was indeed more likely to be acquired. He truly deserves to be the best product manager in the market. He earned at least 20 billion of that 25 billion US dollars.

"Hey, if you're going to thank me, do it with something real. What's the point of just saying it?"

Lei Jun was speechless for a moment: "I shouldn't have said that. You really know how to take advantage of people's goodness. But I really should do some practical actions."

As Xiaomi grows bigger and stronger, its second-largest shareholder, holding 18.92% of the shares, can naturally make a lot of money. However, Xiaomi is not his company after all. His dedication to helping Xiaomi is not simply for the sake of making money.

Strictly speaking, this kid's investment approach is somewhat similar to that of Mr. Ma, which is to invest and then provide strong support.

"Well then, right now what Wei Lai wants to promote most is your new energy vehicles, especially the ES6, right?"

"Yeah, that's right. So, are you going to buy dozens of them to support us?"

Lei Jun gave an OK sign: "300 cars, I'll order 300 from you as a year-end bonus. Each car will be the highest configuration available. Just equip it to the standard of 50 yuan per car, and use all the new technologies you can."

"Holy crap? That's incredibly generous!"

Now it was Tan Jincheng's turn to be shocked. Sales of 1.5 million yuan were not much for Wei Lai, and even with 300 more ES6s sold, the company still couldn't make a profit. What shocked Tan Jincheng was the number of 300.

Xiaomi currently has only 1500 employees, and 300 top-of-the-line ES6s are used for bonuses, which covers as much as 20% of its workforce.

"Haha, this isn't our Pony Ma paying the bill, is it? Besides, the orders for the Xiaomi 2 are even better than those for the Xiaomi 1, so the team really should be rewarded."

The Xiaomi 1 was officially discontinued in September of this year, but some are still available on the market. The estimated shipment volume is about 790 million units. Judging from the current popularity of the Xiaomi 2, it will definitely exceed this number.

With just one phone, Xiaomi has earned nearly 10 billion yuan in net profit. And with MiTalk selling for so much money, there's no reason not to reward the employees.

"Haha, thank you so much! Do you want a hybrid or a pure electric vehicle?"

"Pure electric, right? Since you're going to promote it, then just make it all pure electric. I've test-driven your pure electric and hybrid models, and the pure electric one is indeed very comfortable to drive."

This is indeed his feeling. After experiencing hybrid and pure electric vehicles, he bought a pure electric ES6 without hesitation.

"Alright, Mr. Lei, you're so generous, I can't be stingy either. I'll make sure to use the highest-spec vehicles for these 300 cars and try to build a good reputation for you."

This is truly an unexpected surprise. First, Pony Ma generously paid 7000 million yuan for the goods, and now Lei Jun has placed an order worth 1.5 million yuan.

Make money, make money.

"Okay, then I'll have someone contact your company later. Now, have someone take me to the airport. We won't get a break this National Day holiday. It's all your fault."

"You should be secretly happy. This is the biggest acquisition in the domestic internet industry. You've made a fortune."

On October 4, amidst speculation, an insider revealed that Tencent would acquire MiTalk, a subsidiary of Xiaomi Technology, for $25 billion, creating the largest acquisition in the internet industry and shocking the world!

"Holy crap, these two met up just for this? But why did they go all the way to Ningbo?"

"It must have been facilitated by President Tan. President Tan is the second largest shareholder of Xiaomi, a director of Xiaomi, and also has a cooperative relationship with Tencent. He's awesome."

Amidst the uproar, Tencent was in complete chaos. This involved the migration of 100 million users, and many employees on leave were urgently recalled, inwardly cursing their boss, Mr. Tan.

Xiaomi wasn't much better off. Although MiTalk was an independent platform, in addition to cooperating with Tencent on data migration, it also had to appease MiTalk users, resulting in a constant stream of complaints.

Boss Tan, on the other hand, ignored them and happily discussed next year's plans with Zhang Yong.

(End of this chapter)