Reborn Entrepreneurial Giant

Just when the Jumei team launched the IPO roadshow and embarked on the journey to Wall Street, a wide range of abnormal natural phenomena such as low temperature, rain, snow, and freezing occurred in the south of China. The southern provinces that were not prepared before suffered huge losses.

At this time, Qu Li had already forgotten that there was such a thing, so naturally he would not prepare in advance. The employees who stayed in the country did not realize that the crisis was coming, let alone prepared.

The road show of Jumei in Xiangjiang has been carried out smoothly. It is easier for investors here to understand Jumei’s model. For example, Li \u0026 Fung Group in Xiangjiang is doing similar things. They have the world’s largest procurement and production network, and provide Provide global supply chain management for well-known brands such as Wal-Mart and retailers.

For example, Wal-Mart wants to sell clothes of its own brand Huiyi. In the past when there was no Internet and information was not so smooth, Wal-Mart could not come to Zhongwo to find an OEM factory by itself, so it entrusted the matter to Li \u0026 Fung, from raw material suppliers Li \u0026 Fung Group can help Wal-Mart handle everything from contract factories to transportation.

What Jumei does is to create its own brand, find raw material suppliers and foundries, and organize logistics and transportation by itself. This is the general trend in the future. After the subprime mortgage crisis, a large number of domestic factories either passively or actively accepted informatization. Wal-Mart took the opportunity to abandon Li \u0026 Fung and find OEMs by itself, so as to reduce costs and increase profits.

This is also explained in Jumei’s listing promotion. Sun Moon Fenghua’s self-operated brands will involve various grades of high, medium and low. In the future, it will not be limited to clothing and cosmetics, and may also include food, toys, and daily necessities...

To put it bluntly, it is self-built supermarkets and selling self-operated products. Everyone knows that self-operated brands represent profit guarantees. This can be seen from the fact that Jumei’s transaction volume skyrocketed in 2007 but it was able to achieve profitability. It didn’t work in 2008. The number of employees skyrocketed, operating costs increased sharply, and it was very difficult to maintain profitability. Unfortunately, he would not tell investors.

The Jumei model is very new, but it is easy to understand the essence through the phenomenon. The roadshow is to let investors "understand" the underlying development logic of Jumei, including the investment in logistics, all in order to reduce the overall cost.

The most difficult thing to explain is Jumei’s Chinese background, but shopee’s revenue is clearly trending to exceed that of the domestic market. This is easier for Xiangjiang investors to understand. They will build a mature supply chain management system in China and use low cost and high profit to impact North America. market.

To put it simply, China is the production base, and North America and Europe are the sales markets. We make money in the European and American markets and share profits in Wall Street. As Qu Li said, it is conservatively estimated that Jumei’s market value will exceed 10 billion U.S. dollars within 5 years. There will be challenges if the market value exceeds 100 billion U.S. dollars in 5 years. But for current investors, as long as Jumei’s market value exceeds 10 billion U.S. dollars USD will suffice.

According to feedback from Lehman Brothers, the Xiangjiang Roadshow has a very good effect. Ahri Xiangjiang went public, and its share price and issue price rose nearly three times. Jumei rose from Taobao, and many investors themselves conducted research on Jumei because of Ahli.

When you come to New York, investors here may be more familiar with shopee, which was established only half a year ago, but Lehman, Goldman Sachs, and HSBC collected about 5% of the issuance fee for this offering, so they have to show their value no matter what. As a result, major mainstream financial media watched Jumei in a prominent position. The founder and business model of this company are refreshing.

Because of the success of Glory, no one doubted Qu Li's ability, and because of the success of Coconut Shoes, no one doubted the ability of the Jumei team. The combination of the two seems outrageous, but investors rely on rational analysis of the problem and feel that they can only put it aside.

However, it is very difficult to convince Wall Street that Jumei is an excellent company. In particular, the textile quotas for exporting Chinese women to the United States are heavily restricted. Jumei either applies for a temporary quota or buys quotas from other companies, which is a lot of money. However, the expiry date of the quota system is the end of 2008, so there is a little risk in 2008.

All kinds of tricky problems emerged one after another, including the founder's marital problem, and I don't know how Dangdang got listed. Tudou, Tudou aside, scumbags can't get a house.

However, both Qu Li and Chen Danlin can speak relatively "fluent" English at this time, and the founder's ability has at least a high minimum. Chen Danlin still had some stage fright, while Qu Li was immune to too many attacks, and faced all kinds of doubts and ridicules without changing his face and heartbeat. After finishing the work, I vented to Lehman Brothers: "You guys are eating nothing. Is it normal to have a road show with this level of doubt? Just take money and do nothing?"

Then, there was no more, the person in charge of the Quli project at Lehman invited Andrew to comfort him and arranged for employees to control the field. Sequoia Shen Nanpeng also mobilized the influence of the United States, bragging about Jumei's business model.

In just fifteen days, the schedule was so tight and stressful that Chen Danlin didn't want to move an inch when she was tossing around with Qu Li at night. Don't men and women vent their emotions in the same way?

Finally, on January 10, 2008, the Jumei team rang the bell after experiencing hardships. Qu Li and others stood in the Nasdaq hall and waited. Reporters from Zha Lang and NetEase and several financial media from Wall Street followed. Take photos and witness this historical moment.

Jumei’s listing code is jume, and the issue price is set at 17.5. In the forecast range of Lehman Brothers, the subscription situation is better than Qu Li’s imagination, and there is no risk of failure, but the oversubscription is less than 10 times, which is far less than Ahri’s 200 shares last year. multiple times.

The bell rang, took a group photo, Nasdaq opened, Jumei’s stock price jumped, and the opening price exceeded 18 US dollars. The long-short competition was fierce, and the turnover rate was high.

"Let's go back to the hotel and wait for the news." Qu Li knew that the listing was successful, and the pressure was clear. As for the short-term fluctuations in the stock price, or even falling below the issue price, he could accept it.

"Okay!" Chen Danlin responded, and many executives were unwilling to stay at the scene to watch the market, and went back to the hotel to wait for a rest.

Jumei issued 25 million new shares this time, with a total share capital of 185 million and an issue price of 1.75 billion. The company's market value is about 3.2 billion US dollars. After deducting various expenses, the funds raised this time are about 400 million US dollars.

The allocation and use of funds is a troublesome matter. In principle, as much as possible should be exchanged into soft sister coins to avoid exchange losses, but the development of shopee must be taken into account. The company's CFO Wang Yunliang is responsible for these matters. Although he has no experience, he is willing to learn. He is a workaholic who is more diligent than Qu Li.

Jumei's top executives, including the logistics supervisor with a high school degree, are constantly learning. The motivation for learning is not only the actual needs of the company's development, but also the huge wealth stimulation. In this listing, people who get equity incentives have a lock-up period of several years, but wealth on paper is also money. Are you unhappy?

Lin Bing holds 12 million shares, accounting for 6.5% of the company's shares, and has a net worth of 210 million US dollars (suddenly felt that this distribution is too small to absorb talents like Lin Bing, so why don't you sacrifice Chen Danlin's interests and let Lin Bing hold shares? The proportion increased to 16 million, Chen Danlin dropped from 16.8 million to 14 million, both of them have a small amount of equity incentive shares)

When U.S. stocks closed on January 10, Jumei’s share price rose to 19.5, an increase of about 11%.

Lin Bing’s stake in Jumei increased to 8.6% after adjustment, with a net worth of US$312 million. Chen Danlin held about 7.6% of the shares and was worth US$273 million. Qu Li does not include the 5 million shares in the equity incentive plan, holds 75 million shares, and holds 40% of the shares in Jumei, and his net worth has soared to US$1.46 billion.

It is a great miracle that an orphan who graduated from junior high school has achieved a net worth of tens of billions in three years of entrepreneurship. Many media at home and abroad have reported this financial gossip news.

Sequoia Shen Nanpeng, IDG Xiong Ge and others invested in Quli, and the return of more than 30 times in two years has become a classic case of domestic venture capital.

This is a feast of capital, far from over.