Rebirth: Starting from Lighting Up the Tech Tree

Chapter 154 Capital Attraction

Han Lu pushed the list in front of Zuo Cheng and said, "These are the investment institutions that have contacted us this week. There are fourteen in total, and I've ranked them by level."

The first page was the list. Zuo Cheng scanned it and saw that the top names were all there: Sequoia Capital, Hillhouse Capital, SoftBank China, ZhenFund, IDG Capital, and several companies with industry backgrounds, including a national-level industry guidance fund.

"You came on your own initiative, what does that mean?" Han Lu asked him, her tone confirming rather than questioning.

"This means the market is already repricing 402." Zuo Cheng flipped over the list to the second page, which contained the preliminary offers from various institutions.

The highest valuation was 70 billion, the lowest was 50 billion, and most were between 55 and 65 billion.

"After the data from the third anniversary conference was released, combined with the automakers' contract signings and pre-sale data, outsiders quickly calculated the figures," Han Lu paused for a moment, "and there's another factor: this year, the market is scrambling for new energy and AI stocks, and top institutions are struggling to find good projects with their funds. Our timing is perfect."

Zuo Cheng put the second page aside and asked, "Which ones do you prefer?"

"Sequoia and Hillhouse Capital." Han Lu didn't hesitate. "Sequoia has abundant resources in hard technology, and several of its portfolio companies have potential supply chain synergies with us. Hillhouse has done a lot in consumer and healthcare, but they've recently been replenishing their positions in AI hardware and are willing to value us at 65 billion. As for the industry fund, I suggest adding one that focuses on new energy and space. The amount of capital doesn't have to be large, but it needs to have government connections."

Zuo Cheng thought for a moment and said, "Which one is the one you recommended that has an industry background?"

Han Lu turned to the last page and pointed to a name, "Aerospace Industry Fund, state-owned background, has invested in four aerospace-related projects in the past three years, two of which have obtained national-level project qualifications. They want to give us 1.5 million yuan, corresponding to 6% of the shares, which I think is worthwhile."

"So what is our approximate total?"

Han Lu did the math: "Sequoia Capital will lead the investment with 4 million, Hillhouse Capital will follow with 3 million, the aerospace industry fund will invest 1.5 million, and we'll bring in another pure financial firm to add 2 million, totaling 10.5 billion. The valuation will be set at 60 billion, a 17% dilution, and we'll retain control."

Zuo Cheng glanced at the page but didn't speak immediately. He went over the structure in his mind again.

With a valuation of 60 billion, a 17% dilution, over 10 billion in cash, plus a 3 million prepayment from the automaker, and contract payments from the Tianqiong Phase IV project, the company's liquid assets will exceed 18 billion. What does this scale mean? It means that the research institute for space photovoltaics can be built all at once, Li Guodong's team doesn't need to be recruited in batches, and the initial stages of commercial aerospace can be started simultaneously.

"Sure," he said, "but on one condition. I need to meet with the aerospace industry fund to confirm that the government resources are real and not just on PowerPoint slides."

"It's already arranged, the day after tomorrow morning," Han Lu said. That's just how she is; she's always half a step ahead of him.

"How about negotiating with Sequoia Capital and Hillhouse Capital?"

"I plan to meet separately tomorrow to finalize the terms of the agreement, and then send out the term sheet. They all know there's competition, so it won't take too long."

"Okay." Zuo Cheng stood up. "There's one more thing. When we talk about this financing round, don't just focus on the valuation; emphasize the direction. Highlight space photovoltaics and commercial aerospace. These two terms are currently very popular in the market, and the media will follow up."

Han Lu nodded. "I'll have the brand team cooperate by combining the financing announcement and the direction release into one document and releasing them together."

The entire negotiation process proceeded twice as fast as expected. Sequoia Capital provided its term sheet on the third day, with clean terms, no anti-dilution clauses, and no liquidation preference—basically one of the most favorable standard terms on the market. Hillhouse Capital was a day late, but softened its stance on board seats, requesting only observer seats and not voting rights.

While Zuo Cheng was reviewing the Sequoia terms, Han Lu stood beside him and said, "They've internally defined a term: betting on companies of the era. It means not looking at quarterly earnings, but at the ten-year timeframe."

Zuo Cheng put down the terms and asked, "Do they have any specific comments on space photovoltaics?"

"Yes. A partner from Sequoia Capital just returned from the US last month and said that Musk's Starlink is already testing solar-powered replenishment solutions. Although the approaches are different, the market validation window is opening. He said that 402 is currently the closest company in China to this field."

Zuo Cheng didn't speak, he just nodded.

Competition is real, but so is the first-mover advantage. Domestically, there are almost no competitors in this area. Internationally, the path is different, and as long as the window of opportunity is utilized well, that's enough.

At the aerospace industry fund, Zuo Cheng met with the managing partner, a man in his fifties who had worked in the system for twenty years. His direct manner of speaking was somewhat similar to Wei Dongsheng's. After half an hour of conversation, the partner produced an internal document—a screenshot of space photovoltaics being included in the draft of the National New Energy 14th Five-Year Plan—and said, "If you can complete the technology verification before 2025, we can help you connect with the application process."

Zuo Cheng scanned the screenshot, and the line in his mind became clearer.

Ten days later, the signing ceremony was held in conference room 402. There was no public announcement, only a few internal group photos. Han Lu told him the final figures: Sequoia Capital led the investment with 420 million, Hillhouse Capital followed with 310 million, the Aerospace Industry Fund invested 150 million, and a pure financial institution added another 220 million, for a total financing amount of 1.1 billion, a valuation of 6.2 billion, and a dilution of 17.7%.

Zuo Cheng looked at the number and recalled the first time he met Ginkgo Capital. At that time, it was 150 million yuan with a valuation of 600 million yuan, which was less than three years ago.

Six billion divided by six hundred million equals a little over ten times.

He stamped the document, set it aside, and said to Han Lu, "The B round is closed, when will the C round window open?"

Han Lu paused for a moment, then smiled, "You just finished signing your Series B funding round today."

"I know, but the capital market has a short memory. We need to deliver enough milestones within 18 months before we can talk about Series C. The first milestone is the verification of space photovoltaic technology, the second is the first commercial spaceflight order, and the third is Yu Ying joining the research institute."

Han Lu picked up her pen again and wrote down the three points.

The meeting room was quiet for a while, as the afternoon sunlight from Hangzhou slanted in through the window and shone on the documents to be signed on the table.

Sixty-two billion is just the first step.

He returned to his desk, opened the system panel, and glanced at his points: 397, unchanged. The Series B funding brought capital, but the system's progress relied on technological breakthroughs, not money. The next source of points would have to wait for the activation of the space photovoltaic branches, or the next technological integration.

He marked a date on the calendar, sometime three years from now, and wrote four characters next to it: "Sixth Branch".