Facing cash crunch as a result of rapid expansion, Chinese internet and technology conglomerate LeEco announced receiving US$600 million in funding from Chinese institutional investors and has appointed a new president for APAC operations and CEO of LeEco Hong Kong.
In a letter to employees, LeEco said that the personnel change marked the second stage in the company’s strategy to place more emphasis on maintaining a healthy cash flow over rapid expansion by “temporarily putting a hold on expansion in the Asia-Pacific market”.
As part of its new focus on cash flow, the company announced Anthony Gao (高峻) will be replacing Tin Mok (莫翠天), the outgoing APAC CEO of LeEco, as CEO of LeEco Hong Kong, as well as president of LeEco APAC.
Gao currently heads LeEco’s virtual reality (VR) and augmented reality (AR) as well as MFL (Made for LeEco) arms, the company said in a statement.
This is the firm’s second top-level change in a week.
“Caught in a vortex of rumours, LeEco has responded by replacing two executives in five days. This shows the company’s determination to progress and evolve,” the company said in a statement.
On the financing front, LeEco has secured a US$600 million of funding from major Chinese investors.
The initial funding of US$300 million is expected to arrive on the accounts of LeEco within this month to relieve the urgent cash crunch the company is facing and will support LeEco global and LeEco’s electric vehicle business.
The investors 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.
“I am impressed by the entrepreneurial spirit of Mr. Jia,” said Zhou Jianping, chairman of Heilan. “We believe LeEco is facing risks derived from rapid growth, rather than dangers of survival.”
Most of the investors are headed by LeEco CEO Jia Yueting’s classmates at Cheung Kong Graduate School of Business, where many of the country’s elites seek to get a second degree.