China’s internet giant LeEco announced Tuesday that the company has secured $600 million USD of funding from a dozen of local investors.
The funding comes at a time when it’s most needed while public concerns on the grand vision of the company widens after the firm’s billionaire founder Jia Yueting acknowledged in an internal letter that LeEco is facing a cash crunch as it’s expanding too quickly into a group of fledging businesses from smartphone, car, television and sports media.
The investors of this round come from a variety of industries, including menswear maker Hailan Group, furniture company Man Wah Holdings, pharmaceutical firm Luye Group, medical equipment firm Yuwell Group and real estate company Yihua Group.
Most of the investors are headed by Jia Yueting’s classmates at Cheung Kong Graduate School of Business, where many of the country’s elites seeks to get a second degree.
The fresh funds will go primarily to the firm’s global and car businesses, according to a company statement. Around $300 million USD is to be injected by mid-December while remaining allocations will be decided later.
The investors will not be involved in business operation and the investment is based on trust placed in Jia, according to Zhou Jianping, board chairman of Heilan Group.
In a further move to breathe new life into the company, LeEco announced Tuesday that president of LeEco APAC Tin Mok will be replaced by Anthony Gao, who joined LeEco earlier this year after working at Huawei for 17 years. LeEco’s Asia Pacific expansion will be suspended in a bid to stay more focused on key markets.