On the evening of March 11, Meituan released its first annual report after listing: total revenue in 2018 was 65.2 billion yuan, up 92.3% from the same period last year. Full-year loss of 115.5 billion yuan, including 104.6 billion yuan convertible redeemable preferred stock fair value changes. The full-year operating loss was 11.086 billion yuan, up 189.7% year-on-year.
And before the announcement of the financial report of Didi also continuous huge losses. Didi founder Cheng Wei said in an internal letter that Didi had never profited in the past six years. According to statistics, as of 2017, Didi's loss was about 39 billion yuan, and in 2018 it lost 10.9 billion. Didi's cumulative loss in these years has exceeded 50 billion.
Didi has lost more than $50 billion and Meituan has lost more than 60 billion, but over the years, these two companies have been standing still and getting bigger and bigger, and the companies have become more and more rich. They often start the "burning money mode" and buy mergers and acquisitions everywhere. The founder is also getting higher and higher. Why?
The gold master behind the Internet giant
Today, not only the entertainment industry popular "father protect driving," the Internet is also a "father of all things" industry.
As everyone knows, there is a common "golden father" behind the US Mission and Didi - Tencent. In addition, there are many venture capital books, such as Shenzhen Venture Capital, IDG Capital, Sequoia Capital, Gaochun Capital, Jinshajiang Venture Capital, etc. These venture capital companies are profitable by investment, similar to those of flowers. Money to buy stocks of investors.
In addition to Tencent, Meituan also has the American company Priceline, a power gold owner, as well as invisible supporters such as Sequoia Capital, Hillhouse, DST Global, Fidelity, General Atlantic and Tiger Global Fund.
After completing $4 billion in financing in October 2017, investors have reportedly provided Wang Xing with billions of dollars in financial support, and Meituan has about $7 billion in bank accounts, according to reports.
With such a strong capital, Meituan was able to acquire mobike, the boss of shared bicycles, in 2018, and at the same time make every effort to enter the online car-hailing market, although in the end he basically declared a failure. But enough to see the reason Meituan can withstand the annual loss of the main reason.
Compared to the US group, the strength behind the Didi is not to be underestimated. With Tencent, the "golden father", Didi can be said to be in the early stages. In December 2015, Uber China's WeChat public account was the third time in Tencent's collective title. Although Tencent's chairman Ma Huateng responded in a circle of friends, Uber had illegal marketing behavior, and Didi will deal with it. However, Uber's micro-signal has not been re-opened to this day. There is also a section called Uber, "getting into the world, can't enter a circle of friends." With Tencent escorting, the development of Didi is like a broken bamboo.
In addition to Tencent, Didi has another giant "Golden Lord" - Alibaba. Di Wei, the founder of Didi, worked in Alibaba for eight years and was the deputy general manager of Alipay B2C. However, the rapid acquisition of Didi has received Alibaba's three rounds of billions of dollars in financing, and the two have merged and invested twice.
In addition, including Abu Dhabi Mubadara company (Mubadala), Softbank Corp. Group (SoftBank), Apple, Foxconn, China Merchants Bank, China Life Insurance, China Ping an and other well-known companies have participated in the investment, GSR Ventures, Temasek, DST, China Investment Corporation and other investment giants have also joined the game. Visible, the back of Didi can be called a large vault.
There is also a need for "self-hardening" to iron.
Although Didi and Meituan behind the strong gold master support, but the capital is profit-driven. The fundamental reason Didi and Meituan's future is bright enough is that the company's soft and hard assets are attractive enough.
In terms of soft assets, Didi has almost monopolized the online car market, and its market share of shared bicycle business is also increasing. Meituan has a market share of 62% in the Chinese take-away market, and basically monopolizes the group buying market business. These are the companies. The soft assets, although seemingly invisible, are the company's huge wealth and the future of a company.
The hard assets are inside the company, and those that can be directly valued as money, such as Didi and the US office buildings, vehicles, office appliances and other real assets.
The company's hard assets and soft assets ultimately determine the company's market valuation, which is why Drip and the US group are losing money every year, and the valuation is constantly improving.
With the monopoly of the market and high-quality soft and hard assets, once the two companies are listed, they will inevitably attract hundreds of billions of funds from the market. This is why Didi and Mei Tuan are getting stronger and stronger, and the more they are doing, the more valuable they are. The reason for the higher.
Dialectical view of the loss of Internet giants
In fact, many foreign Internet companies are also losing money.
For example, Uber's net loss narrowed sharply to $370 million from $11.3 billion in revenue last year, but was valued at between $480 and $70 billion when it planned an initial public offering. Earlier, Twitter (Twitter) reported a loss of $79 million before its initial public offering, but was valued at $24 billion at IPO in 2013.
In recent years, almost all Internet companies are burning money all the way, making great progress, losing money, financing, and all kinds of capital are scrambling to throw money.
In fact, unlike traditional industries that focus on costs and benefits, the Internet industry focuses on data and users. And in order to obtain data and users, early can only rely on subsidies and a wide range of advertising, these are the Internet industry guest costs and operating costs.
Ma Yun in the founding of Alibaba, once bragged that the company did not make profits in the first three years.
The founder of Uber has also said that Uber doesn't make money because it mistakenly treats us as a rental company, and we can't even see where the Uber borders are. And expanding the border means burning money and losing money.
This has created an Internet-specific business model-if you can get users, even if you can't make a profit, you can still get venture capital, and you can go public in the future and get a very high market capitalization.
However, this model has a premise that it must maintain sufficient cash flow. Cash flow management is very important, especially in the context of the current economic downturn, the most direct example is ofo, the capital chain breaks, causing market panic, and finally no one is connected.
At present, the science and technology board is in full swing, and the policy of allowing unprofitable companies to go public has brought good news to many technology companies, but it will also bring test to market investors.