Exclusive: Smartisan's Previous Investors Said To Add Their Investment In Smartisan

(Chinese Version)

NOVEMBER, 21st, BEIJING. Today, TMTpost learned that Chinese smartphone maker Smartisan had already completed its latest round of financing with a valuation of around ￥300 million (roughly $43.5 million). An insider revealed to TMTpost that Smartisan s previous investors had decided to add their investment in the smartphone vendor, but declined to reveal more details, such as the total list of investors and their share distribution structure.

This July, Luo Yonghao, founder and CEO of Smartisan Technology, revealed in an interview with Caijing Weekly that: “We ve almost completed the latest round of financing, and everything is going well.” However, he didn t say a word about rumors and doubts over Smartisan s being acquired, having difficulty raising financing or being caught in a cash crisis.

According to public information, we learn that Luo started Smartisan Technology with a personal investment of 9 million yuan from Momo s founder Tang Yuan. Besides, Zheng Gang, Momo s investor and executive partner of Buttonwood, was also one of the first batch of Smartisan s investors.

At the same time, we found that Li Yong, CEO of Yuantiku, Fang Sanwen, CEO of Snowball Finance, as well as Wu Yongming and Sheng Yifei, two of the eighteen founders of Alibaba, are all among the eight shareholders of Smartisan Technology.

Two months before Smartisan 1 was released in 2014, Luo revealed in his Sina Weibo account, saying that:

“We ve completed B round financing of 180 million yuan (around 26.1 million), and Smartisan s valuation would reach a little over ￥1 billion after this round. Therefore, you might as well refer to me as Mr. Billionaire .”

According to Bureau of Industry and Commerce s record, Smartisan increased its shareholders from eight to fifteen after it completed that new round of financing in April. New investors include: Hejun Counselling, Haitong Securities subsidiary Haitong Capital, Guangdong CloudAttic Investment, Suzhou Heju Huiyi Equity Investment, Shanghai Buttonwood Capital and Suzhou Heju Rongyi Equity Investment, etc.

Therefore, we can conclude that although Smartisan only announced its financing round twice in public, it has actually completed three round of financing:

• In December, 2013, Smartisan completed A-round financing of ￥70 million led by Buttonwood Capital. While Buttonwood invested ￥40 million, other investors invested 30 million in total.
• In April, 2014, Smartisan s founder and CEO Luo Yonghao announced that Smartisan had already completed B-round financing of ￥180 million with a valuation of over ￥1 billion.
• In June, 2015, based on Bureau of Industry and Commerce s record and a photo about meeting between Suning s founder Zhang Jindong and Smartisan s founder Luo Yonghao, Suning was indeed involved in Smartisan s C round financing. In addition, Xunyou Technology announced in public that it had invested ￥30 million in Smartisan. Other investors in this new round of financing include: Goldstone Investment, EBI Capital, Baotuan Technology and Whales Capital, etc.

That is to say, Smartisan Technology might have around fifty shareholders up till now. The latest investment Smartisan received is still C-round financing led by Suning. Afterwards, Smartisan never released any more details about its financing progress and the long-awaited D-round financing wasn t completed for a long time.

In addition, it seems that Smartisan hasn t adjusted its record at the Bureau of Industry and Commerce regarding the latest round of financing led by its previous investors.

It is worth mentioning that Luo had already sold off 2.05 million shares to Alibaba, one of the leading Chinese e-commerce service provider, which led many people to believe that Alibaba was to invest in Smartisan.

However, TMTpost found out that although Alibaba had signed Term Sheet with Smartisan at the beginning of this year, it still didn't complete the investment procedure. Yet, Smartisan was in dire need of money to facilitate its R&D . As alternative, Alibaba agreed to sign a bridge loan agreement with Smartisan. While Luo sold off his own shares to Alibaba, Alibaba would offer Smartisan a bridge loan before the investment procedure was to be completed.

However, an insider revealed to TMTpost that the bridge loan was never transferred to Smartisan before Smartisan M series smartphones were released, and there was a time when Smartisan was caught in a financial crisis. In the process, LeTV approached Smartisan, lent a huge sum of money to Smartisan and helped it survive the crisis. This may also explain why Luo Yonghao publicly supported Jia Yueing when LeTV got caught in a cash crisis a few days ago.

Moreover, Liu Jiang Feng, CEO of Coolpad, also showed his support for Luo and his Smartisan in an interview with TMTpost and revealed that Chinese tech companies including LeTV, Xiaomi and Alibaba were all exploring the possibility to invest in Smartisan.

After Smartisan M1 series smartphones were released, they were warmly accepted by the market. It is very probable that these two new smartphones will become the most best-selling smartphones Smartisan has ever made. An insider revealed to TMTpost that Smartisan s previous investors began to see hope again in Smartisan due to all these positive signals and decided to add their investment.

As of press time, Alibaba still hasn t kept its promise and transfer the loan to Smartisan. In this case, Alibaba might have to negotiate with Smartisan again after this latest round of financing added by Smartisan s previous investors.

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[The article is published and edited with authorization from the author @Han Pei, please note source and hyperlink when reproduce.]

Translated by Levin Feng (Senior Translator at PAGE TO PAGE), working for TMTpost.