China-based internet and technology company LeEco has secured $600m in capital from corporates including fashion brand Heilan Home and conglomerate Yihua Group, China Money Network reported today.
The round was also supported by plastic pipe manufacturer Hengxing Group, medical device maker Yuyue Group and pharmaceutical firm Luye Pharma Group. Investment holding company Man Wah Holdings had been named as a participant but subsequently issued a statement denying its involvement.
A total of $300m is expected to be provided to LeEco by the end of this month, while a timetable for the remaining cash has not been revealed. The money will go to LeEco Global and its driverless car subsidiary LeSee, though a ratio was not disclosed.
Founded in 2004, LeEco operates a range of subsidiaries that focus on technologies such as virtual reality, cloud computing, smart bicycles, televisions and smartphones. It has raised a total of at least $3.15bn for the various subsidiaries to date.
The company has reportedly struggled to pay its smartphone suppliers and a construction contractor of late and raised the money partly to settle those bills. The remainder will be used to strengthen LeSee.
The Wall Street Journal reported on Sunday that LeEco founder Jia Yueting wrote a letter to staff telling them the company was facing a cash crunch. The $600m injection comes from corporates all headed by former classmates of Jia Yueting at the Cheung Kong Graduate School of Business.
In September 2016, LeSee, then called Le Supercar, raised $1.08bn in funding from laptop and smartphone manufacturer Lenovo, conglomerate Macrolink Group and Yingda Capital, the venture capital firm backed by the Chinese State Grid, as well as China Minsheng Trust, Hongzhao Capital and Shenzhen Capital Group.
– This artiicle was updated on November 16, 2017 to reflect Mah Wah’s non-participation in the round.