Prometheus Capital, the VC fund controlled by Wang Sicong, is RMB 2 billion ($285 million) in debt after providing a joint guarantee for investors of the now-defunct game live-streaming platform Panda TV, according to an announcement on Prometheus Capital’s website. Panda TV was founded by Wang Sicong.
Why it matters: China’s game live-streaming landscape is known for its cutthroat competition, making survival near impossible for companies with no strong backers.
- The two largest players in the field, Douyu and Huya, are both backed by gaming behemoth Tencent.
Details: Prometheus Capital and Wang, the high-profile son of Chinese billionaire Wang Jianlin, claim to have reached settlement agreements with all of its several dozen investors.
- Prometheus Capital and Wang will compensate for the RMB 2 billion of losses.
- Due to the joint guarantee that Wang provided to investors of Panda Entertainment, Prometheus Capital needed separate settlements with each creditor, causing the negotiations to take over two months, the statement said.
- One of Panda Entertainment’s creditors who invested RMB 9.6 million in the company, however, told The Paper that it never participated in any negotiations or reached any agreements with Prometheus Capital.
- In October, a court in Shanghai imposed limits on Wang Sicong’s high spending for failing to pay RMB 3.6 million to a former livestreamer working at Panda TV. In the same month, a Beijing court seized assets belonging to Wang Sicong for an RMB 151 million debt related to Panda TV and restricted his spending on luxuries.
- The spending restrictions on Wang were lifted on Nov. 22 and Tuesday, respectively.
Context: Launched in October 2015, Panda TV confirmed bankruptcy in an internal letter in March this year, with the company’s COO citing lack of new funding for 22 months as the main reason.
- At the time of bankruptcy, the company was already RMB 1 billion in debt, including RMB 700 million of bandwidth expenses and RMB 300 million of unpaid livestreamer salaries, according to a report from media outlet IT Times.