LeEco Gets a $2.2 Billion Lifeline—But Not for Its Cars
CEO Jia Yueting is still looking for investors to help build its biggest mobile device.
Capping an end to the financial troubles that threatened the company in the later half of 2016, Chinese electronics manufacturer and Faraday Future owner LeEco announced that it has secured $2.2 billion ($16.8 billion yuan) in financing from the real estate giant Sunac China. That's the good news. The bad news is that its autonomous electric vehicles the LeSee and LeSee Pro may not directly benefit from this cash infusion.
Sunac China is the newly formed subsidiary of real estate giant Sunac China Holding Company that is providing the latest round of financing. LeEco's CEO Jia Yueting hashed out terms of the agreement during a six-hour meeting with Jia Rui Hui Xin, the founder of Sunac China Holding Company. As a condition of the investment, Yueting will bring on Jia Rui Hui Xin as a strategic investor of Leshi Internet Information and Technology Corp.
The newly formed partnership should help Yueting achieve his vision of an all-all-encompasing content ecosystem. The billionaire founders will marry traditional real estate development with the Internet-of-Things to create "smart communities." Last year LeEco purchased 49 acres of land in Santa Clara, Calif. for $250 million on which it plans to build "LeEco City," which will demonstrate how a true seamless connected community could operate.
Although a connected vehicle is part of the content ecosystem Yueting is trying to build, its autonomous electric luxury cars, LeSee and LeSee Pro, may take their time falling into place. The new investment will be used primarily to support Leshi Holding Company, its TV manufacturing arm Leshi Zhixin Electronic Technology, and its film production and distribution company Le Vision Pictures, according to its news release.
LeEco, which is responsible for building the vehicles, is a sister company to Leschi rather than a subsidiary of the conglomerate. In exchange for the capital, Sunac China will receive a 8.61% stake in Leshi Internet Information and Technology Corp., a 15% stake in Leschi Pictures, and a 35% stake in Leschi Zhixin.
What this means for the LeSee and the LeSee Pro wasn't detailed in the news release, and the company couldn't provide additional information on the status of the vehicles or how if the money could be used to develop the vehicles. Yueting said in a Bloomberg article that he is still looking for investors for his automotive businesses, which also include a personal investment made by the billionaire into Faraday Future and Lucid Motors.