Rebirth: War on the Honest

“A pleasure to work with.”

"Mr. Gu, from now on Ele.me will be our own property, so we must give you more support."

A few days later, Ele.me announced at an on-site press conference that it had received 1 billion yuan in Series C financing led by Paradise Capital. The two parties will achieve full cooperation in various fields.

Obtaining financing twice a year is rare in the entire Internet industry.

We just completed Series B financing at the beginning of the year and received several million US dollars, and now it’s coming again?

Is Ele.me taking too big a step and burning through money too quickly?

In just over half a year, Ele.me raised funds twice, which also made many competitors who secretly want to enter the food delivery industry look at it with eager eyes, silently raising question marks in their hearts.

It may be time to take action.

If they don't take action, Paradise Group and Ele.me will really build an industry moat. Once they successfully build a reputation and go public, people may not even be able to drink soup.

In the process of a company's listing, there are no regulations on how many rounds of financing the company must go through. It all depends on the company's own financing needs.

Corporate financing, to put it bluntly, is how companies obtain positive cash flow.

Because with money, you can be a wealthy person and "buy, buy, buy", buy equipment, land, resources, talents, users and even competitors.

Anyone with basic financial knowledge knows that debt financing refers to borrowing money from banks or non-bank financial institutions, or issuing bonds, etc. Debt financing requires the payment of principal and interest, which can bring leverage returns, but will increase

The debt ratio of the company.

Equity financing does not require repayment of principal, and there is no leverage income brought by debt financing. New shareholders will be introduced, and the potential danger is that part of the control of the company will be lost.

Therefore, when debt financing does not bring in money, many companies choose equity financing.

Furthermore, financing in the private equity field also looks at companies with unicorn potential in a different light and pursues them relentlessly.

For Internet entrepreneurs, they often need to go through the following rounds of financing before their company goes public.

1. Seed round - team, idea, product

Seed-stage financiers are usually in an initial state where they only have an idea and a team, but no specific product.

Investors are usually family and friends, or entrepreneurs pay out of their own pockets, such as Ele.me F4 represented by Zhang Xuhao. Of course, there are also many seed-stage investors.

If your financing project has a team and an idea, and it will be implemented immediately, you can start seed round financing.

In the seed round, the risk of project failure is extremely high. When it comes to the angel round, it is required to produce an mvp (minimum viable product).

Seed rounds generally range from RMB 500,000 to RMB 2 million, making it difficult for institutions to get involved. Generally, individual angels and incubator foundations focus on this area.

2. Angel wheel - visible product, clear business model

Projects in the angel stage usually have an initial team, a mature product is launched, and a preliminary business plan for the product; there is seed data or proof of growth rate, retention, repurchase, etc. that can show the data growth trend.

At the same time, products tend to accumulate some core users, and the business model is in the stage of being verified.

Then it is most appropriate to find angel investors or institutions and start angel round financing. Generally, the amount of this round of financing is about 3 million to 5 million.

3. Pre-A round - a certain scale, leading the market

The Pre-A round is a mezzanine round, and financiers can decide whether they need financing based on the maturity of their projects.

If the overall data of the project in the early stage has reached a certain scale but has not yet occupied the forefront of the market, then Pre-A round financing can be carried out.

At the same time, pre-A round or A-round financing means that you have clearly not begun to take shape, but the money is burned out, so first come to the pre-A round of Jianghu to rescue you.

Or after the A round of financing is completed, another big shot thinks you are good and wants to invest in your business, but you have no new business progress and the valuation has basically not changed, so you come to the A round.

4. Round A - a business model supported by products and data, leading the industry and beginning to take shape

Generally, A is the first round. It is very important for companies to raise funds in the first round. For projects that have mature products, complete and detailed business and profit models, and have a certain status and reputation in the industry, even if they may be losing money at this stage

, you can also choose a professional venture capital institution for Series A financing.

At this stage, it is no longer possible for financiers to rely solely on ideas to raise funds. Instead, they must have users, including daily active users, monthly active users, their own business models, and mature products that can compete with competing products.

A certain market position.

Ele.me’s Series A financing was obtained with a multi-million dollar investment from Jinshajiang Venture Capital in 2011, launching a complete and detailed business and profit model.

5. Round B - Proven business model, new business and new field expansion, relatively strong competitive advantage

After a round of burning money, the project has made great progress, the business model and profit model have been well verified, and some have begun to make profits.

At this time, financiers may need financial support to launch new businesses and expand into new areas, so it is appropriate to persuade the previous round of venture capital institutions to follow the investment, or to find new venture capital institutions to join, or to attract private equity investment institutions (PE).

) to join and start a new round of Series B financing.

At the beginning of the year, when Ele.me received its Series B financing, it was actually far from as eye-catching as it is now.

6.C round - proven business model, new business and new field expansion

If the financier's project is very mature at this time, can basically sit among the top three in the industry, and is preparing for the next step, then it is suitable for Series C financing.

At this time, in addition to further developing new businesses, it can also lay a solid foundation for completing the closed business loop and preparing for listing.

The cooperation between Ele.me and Paradise Investment not only means that Ele.me has successfully achieved profitability, but also means that it is currently firmly in the top spot.

For a company that has raised funds twice within half a year, what else can it say other than that it has the courage to swallow up money?

"If nothing else happens, I think after this financing, Ele.me will have competitors."

After the press conference, Gu Yun and Wen Jue were invited to attend a dinner organized by the Ele.me team in the evening.

Due to Gu Yun's status, there were not many people accompanying him for dinner, only the four founders. Everyone drank beer and chatted while eating.

"It's nothing, Mr. Gu. Ele.me has ruined the jobs of countless small workshops until now. We have fought hard all the way. We are not afraid of competition."

Zhang Xuhao raised his glass with a smile and clinked it with Gu Yun.

There is no doubt that what Ele.me meets is a real rigid need, which is the lowest and indispensable need in Maslow's theory.

Faced with such a rigid need, it is obviously impossible without competitors.

But what Zhang Xuhao didn't expect was that after having a new partner, the opponent he was about to face was no longer a small workshop, but a high mountain at the same level as the Paradise Group, which could integrate resources to replicate and crush it.