The listed company Xinhu Zhongbao invested 1.23 billion yuan to invest in Hangzhou Funchain Technology Co., Ltd. (hereinafter referred to as "Quchain Technology"), making Funchain Technology the most valuable underlying technology company in China's blockchain field. This shareholding has also become the largest PE financing in the history of China's blockchain technology development so far.
For a start-up company with a revenue of only 5 million yuan in 2017, what does the huge financing mean, and what is the prospect of blockchain technology? The reporter has an exclusive interview with Li Wei, CEO of Qulian Technology.
Li Wei said that for fast-growing emerging technology companies, it is inappropriate for machinery to apply the valuation of traditional companies. The strategic shareholding of Xinhu Zhongbao focuses more on the potential value of blockchain technology and the technical advantages and first-mover advantages of Qulian Technology in this field. At present, the blockchain technology business model is gradually being constructed, and there is also much room for improvement for traditional Internet companies.
Is the valuation too expensive?
Xinhu Zhongbao announced at the end of May that it intends to acquire 1.9 million yuan of capital contribution through its wholly-owned subsidiary Zhejiang Xinhu Zhinao Investment Management Partnership (Limited Partnership) for 109 million yuan, and to subscribe for new registered capital at a price of 1.121 billion yuan 19.59 million yuan. After the capital increase is completed, Zhibrain Investment accounts for 49% of the registered capital of Funchain Technology.
Judging from the valuation of Xinhu Zhongbao before its shareholding, the valuation of Qulian has reached 1.5 billion yuan, breaking the highest financing record for Chinese blockchain companies held by Matrix Finance two years ago.
Statistics show that last year, Qulian Technology's operating income was only 5 million yuan, with a loss of 15 million yuan. In this regard, not only investors questioned the valuation, but even the exchange also issued an inquiry letter
.
Li Wei said that many investors only saw the operating income of 5 million yuan last year, but did not know the company's future operation and growth potential. He said with certainty that the company's revenue this year can reach an order of magnitude. At the same time, blockchain technology is a fast-growing industry. From the perspective of the development of the entire industry, blockchain technology will indeed reconstruct the Internet, and the traditional Internet model will be changed by blockchain technology. The value of blockchain technology change is huge.
According to Li Wei, as a leading company in the industry, Funchain Technology not only has Hyperchain, the underlying blockchain platform with independent intellectual property rights, but also has a large number of applications in the financial field. Funchain Technology is one of the first blockchain companies to pass the national standard test of the Ministry of Industry and Information Technology. Its core technology is an independent and controllable domestic blockchain underlying platform with leading independent intellectual property rights.
From the perspective of the entire industry, most of the blockchain field is project financing. Judging from the financing of some well-known projects, the valuation can reach more than 10 billion yuan. The internationally well-known project is the R3 Blockchain Alliance, which specializes in the development of blockchain projects for the financial industry. At the beginning of blockchain technology in 2016, R3's Series A financing has reached 100 million US dollars.
"The technical strength of Qulian Technology and the products it produces are far more valuable than the subjects of these projects, and the application cases are also richer, especially in the financial field. The market simply examines the investment from the perspective of traditional valuation, and does not pay attention To the huge value of blockchain technology itself. In the field of blockchain, this valuation is very reasonable and there is even a lot of room for growth.†Li Wei said.
Data shows that since its establishment, Qulian Technology has conducted four rounds of financing, and its valuation has risen by nearly 50 times. In the first round of financing in 2016, listed companies Xinyada, Zhejiang University Insigma and others invested in shares, and Qulian was valued at 50 million yuan. The latest round of financing valuation rose to 1.5 billion yuan. Based on this valuation, Xinhu Zhongbao issued additional shares of 1.2 billion yuan.
"Actually, it can be seen from the listing of the '51 Credit Card' in Hong Kong stocks that Xinhuzhongbao has a strong ability to grasp strategic opportunities and will make an all-out effort as long as it is optimistic. The strategic investment in Qulian Technology is also that Xinhuzhongbao is optimistic about the blockchain strategy. A proof of value." Li Wei said.
Subvert the "traffic is king" model?
Li Wei believes that the current blockchain technology is similar to the big data technology ten years ago and is basically in its infancy. Different from the popularity in everyone's perception, in fact, it has only been two years for blockchain technology to truly gain recognition in the technology circle.
In his view, blockchain technology relies on data encryption, time stamping and distributed consensus algorithms to implement distributed ledger technology with advanced functions such as chain storage, smart contracts, and privacy protection. Blockchain technology is more like a database and an operating system. It is the basic IT industry, the infrastructure of the next-generation Internet, and a future technology development path. The fast-developing blockchain technology is considered to be used to solve the new generation of Internet value exchange problems and the credit problem of network transmission.
Li Wei believes that there is no ultra-large-scale commercial application of blockchain at present, but it will appear soon. In the future, a benign interaction between technology and business will be needed for continuous progress.
Entering 2018, traditional Internet companies, both BAT and ATM, have begun to show a strong interest in blockchain technology. Blockchain technology has begun to touch the sensitive nerves of traditional Internet companies.
Li Wei said that China's traditional Internet is an era where traffic is king. It is a business model where giants monopolize the scene and own traffic and have everything. But the blockchain will build a win-win model for participants and operators, making the entire ecosystem more friendly and more vital.
Li Wei said that blockchain technology is not simply peer-to-peer and decentralized. The emergence of blockchain technology will make the entire traditional Internet platform more credible, more transparent, and fairer. The blockchain ecology can be a peer-to-peer ecology, similar to e-commerce platforms and more open. At present, the applications provided by blockchain technology are more Internet-based, and more emphasis is placed on fairness and two-way incentives, so that everyone can participate in and share ecological results. This is the best business model.
The technical vision of Qulian Technology
After strategic cooperation with Xinhu Zhongbao, the development strategy of Qulian Technology will have two directions in the future-to do future technology and build a technology ecology.
In the first direction, it is necessary to maintain the strongest technical research and development team in blockchain technology and continue to update and iterate. The latter direction is to develop scenarios and ecological fields, gradually penetrate into various industries such as finance, retail, energy, government affairs, and medical care, and build ecosystems, or "blockchain+" in various industries.
Li Wei said that through this round of financing, the company not only possesses leading blockchain technology, but also has relatively sufficient funds, which can further expand the application scenarios. Previously, the application scenarios of Funchain blockchain technology were only in the financial field, but in the future, it will work with partners to jointly develop more ecological scenarios, not limited to cooperation and investment.
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