"The days of providing generous funding to unprofitable companies are over." After WeWork announced the suspension of its IPO plan, Morgan Stanley's chief U.S. equity strategist Mike Wilson issued this view, which quickly became widely known.
spread.
Zhu Xiaohu from Jinshajiang Venture Capital shared a screenshot in Moments, and Wang Ran from Yikai Capital still posted a long Weibo post even when he was newly married, saying he strongly agreed, "What kind of era is this era that is ending? To put it simply, it is
In an era where valuations can be arbitrary and impunity in the sub-market, growth was considered a top priority for both entrepreneurs and investors during the mobile Internet venture capital boom in the past two years, and many failed to find a business model.
As long as a company that continues to lose money can tell a story of rapid growth to the outside world, it will not be difficult to obtain financial support from the market.
When faced with questions about how to make money, their answers are usually vague: Tencent didn't make money at the beginning, but look at it now.
The profound meaning is self-evident: Tencent initially acquired a large number of users through QQ but did not establish a business model. Now it has become an Internet giant and its market value ranks among the top in the world. This is indeed an excellent example that can convince the questioner - it is just that the giants are gaining
The difficult process of finding a profit model after a large number of users is usually ignored by most people.
But the trend has obviously changed. After experiencing the carnival-like mobile Internet venture capital boom, everything is returning to rationality.
Looking back at history, the same story always repeats itself, just in different clothes.
It’s hard for anyone to forget that five years ago, after receiving capital support from Tencent and Alibaba respectively, Didi and Kuaidi launched a subsidy war. This was the craziest money-burning war in the history of China’s Internet. They even had their own Baidu Encyclopedia.
——Ride-hailing software subsidy war.
The two sides were fighting in close quarters, and the situation was stalemate. Looking back briefly, everything still seemed crazy.
On January 10, 2014, Didi announced the launch of WeChat payment in 32 cities. By using WeChat payment, passengers will receive an immediate 10 yuan discount on fares and drivers will receive a 10 yuan bonus.
Ten days later, Kuaidi Taxi and Alipay announced their follow-up.
Since then, the subsidy strategy has gradually evolved to limit the number of trips to subsidize. By the end of March that year, Didi Dache announced that since the start of the subsidy, its number of users has increased from 22 million to 100 million, and its average daily orders have increased from 350,000 to 5.2183 million.
, subsidies amounting to 1.4 billion yuan.
Although the subsidy per order has dropped by two-thirds from its peak, hundreds of millions of yuan are still spent every month.
The subsidy war has brought a lot of capital consumption to both parties. On Valentine's Day in 2015, Didi Kuaidi announced its merger, but the subsidy war was not over. Uber China's aggressive offensive shifted the war between local giant Didi and global giant Uber.
The money-burning war has begun again, and capital continues to provide ammunition.
In July 2015, Didi Kuaidi announced the completion of a US$2 billion Series F financing, just two months after its US$142 million Series E financing.
In September, Didi Kuaidi announced again that new investors had been added to its Series F financing, with the US$2 billion turning into US$3 billion, and the valuation rising to US$16.5 billion.
In the same month, Uber’s independently registered company in China, Wubo, also completed a US$1.2 billion Series A financing.
In January 2016, China’s Uber completed another Series B financing of approximately US$2 billion.
Faced with the fierce battle, Didi CEO Cheng Wei wrote in an internal email: "Uber is the company with the strongest financing capacity in the history of the United States. It has entered China with huge sums of money and must support multiple business lines to win the financing battle.
It’s the speed of life and death.” Uber founder Travis Kalanick said, “I hope the world is not like this. I prefer to create (Building) instead of constantly raising money (fundraising). But if I don’t participate in large-scale financing.
If they do, they will be squeezed out of the market by other competitors who spend money to buy shares. "It's like riding a high-speed roller coaster. Although they are the founders of the company, neither Cheng Wei nor Travis Kalanick can control things.
The next direction.
The subsidy war for taxi-hailing software has opened up a new phase of competition in China’s Internet market. Since then, money-burning subsidies have become the mainstream way for start-ups to acquire users.
The 2014 summer release of "Transformers 4" kicked off the large-scale subsidy of movie ticket prices by online ticketing platforms.