Chapter 318: Daniel: A Landed Tycoon from Asia Has Arrived! Spotify's Miserable State!

Three days later, at 19 Kungsgatan, Stockholm, the capital of Sweden.

An all-black Volvo XC90 turned off the main road and pulled into Spotify's headquarters building.

It was a twelve-story office building, with an overall design dominated by Nordic minimalism, blended with modern design concepts.

It looked a bit shabby, seemingly at odds with Spotify's market position among European and American music apps.

Daniel Ek wore a blue haute couture suit, a white shirt inside, and a royal blue tie; the suit was crisp, and he was dressed extremely formally.

In Stockholm in October, the daytime temperature was only 8 degrees Celsius. He had wanted to wear a wool trench coat, but to keep up appearances, he gritted his teeth and waited downstairs anyway.

"Boss, the other party is only a Chinese person. Although the Alexa smart speaker has brought the company 3 million paying users, I don't think he deserves such a red-carpet reception.

Microsoft, Google, and Amazon are all developing similar smart speaker products. We should focus our energy on communications and cooperation with other terminal products."

Spotify's co-founder Martin curled his lips, suddenly finding Daniel's behavior incomprehensible.

In his view, the success of the Alexa smart speaker was merely a matter of seizing the initiative. Once Microsoft, Google, and Amazon ramped up, given Sister Chengzi Technology's R&D strength, it would have no advantage whatsoever before these European and American research giants.

"Martin, I hope you will immediately put away your contempt for Sister Chengzi Technology. Chen Yansen's commercial talent is in no way inferior to Facebook CEO Zuckerberg. If not for the different environments they were in, Chen Yansen's business achievements would probably have long surpassed Zuckerberg's."

Hearing this, Daniel's expression immediately became Solemn, and he admonished in a stern tone.

"I know Sister Chengzi Technology's valuation exceeds 20 billion USD, but that's only a valuation. Facebook is already listed, and Zuckerberg's stake is worth as much as 30 billion USD."

Martin shook his head, indicating disagreement.

"The information you have is too limited! Chen Yansen also has in his hands a courier company with a daily average of over 10 million parcels, and an e-commerce company with annual sales exceeding 200 billion. In terms of overall strength, Zuckerberg is far inferior to Chen Yansen."

Daniel shrugged and said with a light smile.

A daily average of over 10 million parcels?

Martin was momentarily stunned. He had only investigated information on Sister Chengzi Technology, and had overlooked the other subsidiaries controlled by Senlian Capital.

One must realize that Sweden's total population doesn't even reach 10 million!

Yet the other party's courier company can provide logistics services for over 10 million people every day. Although he didn't understand how valuations in the logistics industry are calculated, based solely on an annual parcel volume exceeding 3 billion, its valuation would not be lower than 20 billion USD.

Therefore, he had to admit that he had indeed underestimated the other party's financial resources and influence in the East.

Just then, a Volvo XC90 drove into everyone's line of sight, and then stopped in the open space in front of the main gate.

*Click*!

The car door opened at the sound!

Chen Yansen stepped out. Today he wore a light gray suit, extremely close-fitting. At 1.86 meters, his tall, straight figure, even standing before Daniel Ek and the others, was subtly a few centimeters taller.

Song Yuncheng followed closely behind, wearing a fleece-lined business suit, participating in this meeting in the role of assistant.

"Mr. Chen, welcome!" Before Chen Yansen could approach, Daniel took a group of Spotify's senior executives and proactively went up to greet him.

In terms of wealth and status, he had absolutely no comparison with Chen Yansen.

Eight months ago, Spotify accepted 40 million USD in financing from JPMorgan Chase, with a post-investment valuation reaching 1.5 billion USD, easily stepping into the ranks of unicorn companies.

But Chen Yansen's Sister Chengzi Technology had received 1.35 billion USD in financing from DST Capital a full year earlier, with a valuation of as much as 9 billion USD.

Now, a year later, Sister Chengzi Technology has become a top smartphone manufacturer in Hua Country, with a valuation very likely above 20 billion USD.

What's more, Sister Chengzi Technology is only one of the many subsidiaries under his control.

Daniel considered himself a genius in the business field, but compared with Chen Yansen, the sense of accomplishment from founding Spotify instantly vanished.

Therefore, he kept his posture very low.

"Mr. Daniel, nice to meet you! Thank you for your work in building the Alexa smart speaker application ecosystem."

Chen Yansen extended a hand and responded with a smile.

In his eyes, Spotify at this time was no different from Kugou, Kuwo, and Tian Tian Music domestically, with a valuation of at most only 2.5 to 3 billion USD.

Only the Spotify that would ring the bell at the New York Stock Exchange six years later, with a market value exceeding 26 billion USD, was worth a second glance from him.

Daniel hurriedly grasped Chen Yansen's right hand and said with a smile: "Mr. Chen is too kind. Sister Chengzi Technology is also an important partner of Spotify."

The two sides exchanged a few pleasantries outdoors, and Daniel led Chen Yansen and Song Yuncheng together into Spotify's headquarters building.

The group took the elevator up to the rooftop terrace.

Standing here, one could overlook the entire city of Stockholm and the coastal scenery. "Please sit down, Mr. Chen!" Daniel said warmly.

In 2012, Spotify was in a period of rapid growth. Its main operating regions were in European and American countries such as Germany, Australia, Ireland, and the Lighthouse, and it was tentatively cooperating with Penguin Music, preparing to develop the Hua Country and even Asian markets.

Last year's revenue was 240 million USD; this year's Q1 to Q3 revenue was 690 million USD, with obvious income growth.

But what gave Daniel a headache was that, in order to obtain usage rights for a cumulative 15 million tracks from record companies such as Universal, Sony, and Warner, Spotify had to pay a huge copyright fee every year.

It even accounted for 50% of revenue!

The more users, the greater the loss!

Although there was no Shangshi Company under Chen Yansen's name, the other party's Senlian Capital likewise possessed abundant financial strength.

To put it bluntly, Daniel wanted to take this opportunity to seek financing from the Asian businessman before him and obtain a generous sum of development funds.

In the past three months, he had also been in contact with Gao Sheng, but the other party was only willing to make an insulting offer of 2.4 billion USD, which Daniel naturally refused.

But only three months remained in 2012. If he still couldn't secure financing, he wouldn't even be able to pay the copyright fees by then, let alone put out advertisements and develop new users.

"I heard Apple is negotiating with record companies, planning to increase the number of tracks in iTunes."

Chen Yansen said casually after sitting down.

Daniel's heart tightened upon hearing this. Apple's smartphone shipments in European and American regions were second only to Mountain Star. Relying on its terminal advantage, iTunes posed an enormous threat to Spotify.

This was also why he Value so highly Sister Chengzi Technology!

The Alexa smart speaker was only one part of it; Sister Chengzi Technology's move into the Eastern European smartphone market let him see a glimmer of an opportunity.

If Spotify could reach a strategic cooperation with Sister Chengzi phones and pre-install the software on the phones, it could achieve low-cost customer acquisition.

After all, Facebook's advertising costs were too high, and combined with the pressure of copyright fees, he was really struggling to bear it.

"iTunes's library is far inferior to Spotify's. To improve user experience, I have signed copyright licensing agreements with record companies such as Universal, Sony, and Warner, with a total library exceeding 20 million tracks. Mr. Chen, Spotify is the best choice for Sister Chengzi Technology."

Daniel hurriedly explained.

Afraid that Chen Yansen would ditch Spotify, he switched the music service provider on his Alexa smart speaker to iTunes.

"Is that so?" Chen Yansen replied noncommittally.

"Mr. Chen, what do you think of Spotify as a product?" Daniel gave a dry laugh, rubbed his nose, and changed the subject.

What do I think?

Chen Yansen narrowed his eyes slightly, mulling over the meaning behind the other's words. Seeing Daniel's eager expression and ingratiating smile, he wondered—could this guy be treating him as a sucker, trying to get him to invest?

In just a few breaths, his mind spun rapidly, listing over a dozen possibilities, but the probability of investment was the highest.

"Mr. Daniel, do you want me to tell the truth?"

Chen Yansen replied with a light laugh.

"Of course." Daniel sat up straight, ready to hear this business genius's take on Spotify's business model.

"High licensing costs, an unclear profit model, slow user growth, low paid-conversion rate…"

Chen Yansen didn't hold back in the slightest, pointing out Spotify's problems one by one.

The smile on Daniel's face gradually faded, his facial muscles stiffened, and an awkward expression surfaced involuntarily.

The problems Chen Yansen mentioned—he knew every one of them.

Gao Sheng's investors had used similar reasoning to forcibly push Spotify's valuation down to 2.4 billion US dollars.

But precisely because it was the truth, it cut straight to the heart.

Daniel hadn't expected that Chen Yansen's truth would contain not a single drop of water—this guy was far too blunt.

Seeing Daniel's expression growing uglier, Chen Yansen reined himself in a little and stopped the topic.

"Mr. Chen, I'm working on improving the problems you mentioned. What I want to know is—does Spotify, in your view, have any investment potential?"

Daniel took a deep breath and asked point-blank.

(End of chapter)