Chapter 319: Over 60x Investment Return! Chen Yansen: I Just Made It Up!

In 2012, Spotify had just completed its Pre-E round of financing, with a post-money valuation of $1.5 billion.

After eight months of rapid expansion, reevaluated based on current market share and paying user numbers, its valuation stood at approximately $2.5 to $3 billion.

Compared to its $26 billion IPO valuation six years later, there was an eight to ninefold growth potential; compared to its peak market cap of $149 billion, the profit opportunity exceeded sixtyfold.

For Chen Yansen, investing in Spotify would not only yield substantial returns but also complement the application ecosystem of Alexa smart speakers.

Moreover, Daniel Ek’s pricing model was not high; if Apple’s iTunes were used, Cook might charge him a 30% music royalty fee.

Thus, Spotify clearly possessed investment value at this moment.

Chen Yansen looked at Daniel, deliberately showing hesitation, and after a silence of over ten seconds, spoke slowly:

“Senlian Capital has not yet entered the overseas investment field. I personally believe in Spotify’s future development, but only if issues such as high copyright costs, unclear profit direction, weak user growth, and low conversion rates are resolved.”

For a music app, profitability difficulties alone would deter 99% of potential investors.

After all, investors’ core demand is profit, not funding entrepreneurs’ dreams with their own money.

The copyright dilemma was like quicksand, tightly entangling Spotify.

Daniel nodded slightly and sat upright, replying: “Mr. Chen, I acknowledge that copyright expenses are indeed Spotify’s greatest obstacle to profitability.

To address this, I’ve communicated with Universal, Sony, and Warner, and plan to optimize royalty payment models by charging based on actual plays, thereby reducing copyright costs for non-hit songs.”

“Will Universal, Sony, and Warner agree?”

Chen Yansen asked with a smile.

Who would willingly give up meat already in their mouth?

The more Spotify users there are, the higher the royalties for record companies; for Universal, Sony, and Warner to agree would be a miracle!

He used the word “plan,” and no contract had been signed—it was purely a temporary excuse for fundraising.

Seeing Chen Yansen wasn’t fooled, Daniel sighed slightly; Asian investors tended to be shrewd and rational.

Three years ago, Li Ka-shing’s Horizon Ventures participated in Spotify’s Series B funding; during negotiations, Li’s financial analyst presented a startling valuation model that forced the offer down by $20 million.

In his view, even if Chen Yansen had no professional financial or legal staff accompanying him, he was clearly a shrewd businessman, hard to deceive.

Daniel paused, then looked at Chen Yansen and said: “If Spotify collapses under copyright costs, Universal, Sony, and Warner will each lose $500 million annually; as Spotify’s market share grows, this number will expand further—to $2 billion, even $5 billion. They won’t sit idly by as Spotify declines.”

The three major labels might make concessions, but the extent remained uncertain.

His business instincts and operational skills were solid, but constrained by high copyright costs in Europe and America, each funding round reduced the founding team’s equity stake further.

Previously, he had approached Goldman Sachs, Fidelity Capital, and Coca-Cola investors, but after discussions, the highest offer was only $2.8 billion—far below his bottom line.

That’s why he cautiously probed Chen Yansen’s investment interest, seeking non-Euro-American investors to dilute shareholder concentration and secure his controlling stake.

Chen Yansen smiled, noncommittal: “Maybe.”

“Spotify is preparing for its Series E financing…” Daniel cut straight to the point.

“You want me to invest in Spotify?” Chen Yansen interrupted, sounding surprised.

“Exactly! Of course, whether cooperation happens depends on Mr. Chen’s willingness,” Daniel replied.

“What’s your target valuation?” Chen Yansen leaned back, picked up his hot coffee, and took a sip.

“$3.4 billion. If Chen Yansen is interested, I’m willing to offer 5% equity.”

Hearing this, Daniel’s face lit up with unguarded delight, and he quickly replied.

“Too high. Do you know what a music app with 20 million daily active users and 5 million paying users typically gets valued at in China? At most $300 million to $500 million.”

Chen Yansen shook his head slightly, answering himself.

“But Spotify targets the global market—its potential is different. Once successfully launched, its future market cap won’t be lower than $10 billion.”

Upon hearing “$300 million to $500 million,” Daniel immediately panicked, leaning forward to respond.

“I heard Universal Records is secretly negotiating an exclusive licensing deal with Apple. If Spotify can’t afford copyright fees, the three major labels might just wait for its cash flow to collapse, then buy it cheaply.”

Chen Yansen set down his coffee cup and smiled lightly.

“Impossible!” Daniel turned pale, denying it in disbelief.

“Maybe it’s just rumor—don’t take it seriously,” Chen Yansen said, sounding casual.

But Daniel’s mindset was already shaken; fearing betrayal by Universal, Sony, and Warner, and aggravated by unreasonable investor pressure, he actually believed it by fifty to sixty percent.

“The 5% equity ratio is fine, but I can’t accept a $3.4 billion valuation. If it’s under $3 billion, there’s still room for cooperation.”

Chen Yansen continued.

“$3 billion is too low—Goldman Sachs offered more than that,” Daniel immediately refused.

“Then forget it. Let’s put investment on hold and talk about collaboration between Alexa smart speakers and Spotify,” Chen Yansen cut the topic short without hesitation.

He didn’t believe a word of it.

If Goldman Sachs was willing to offer over $3 billion, why was Daniel begging him for investment?

What did he want?

Such talk might fool new investors, but to Chen Yansen, it was a transparent lie.

Daniel fell silent—he hadn’t expected Chen Yansen to play by no rules.

He forced a laugh and followed Chen’s lead, shifting from smart speaker ecosystems to Eastern European mobile markets, and volunteered that he had operator channel resources in Germany, the UK, and France that could help Orange Mobile enter Western Europe.

“Thank you,” Chen Yansen said calmly.

After struggling for a long time, Daniel finally couldn’t hold back and lowered his offer to $3.2 billion.

“Let’s each give a little—$2.8 billion,” Chen Yansen said calmly.

Daniel froze. Each side giving a little should be $3 billion—Spotify had already given two steps back!

He thought for a moment and said: “Minimum $3 billion.”

“Let’s talk next time,” Chen Yansen waved him off, refusing decisively.

He had no strong interest in investing in Spotify; if the price was low, he’d invest casually; if too high, walking away didn’t matter.

A $2.8 billion valuation matched Fidelity’s offer and exceeded Coca-Cola’s by $100 million—not a high price at all.

Seeing this, Daniel had no choice but to give up.

Afterward, he stopped pressing on investment or collaboration, instead introducing Chen Yansen and Song Yuncheng to Stockholm’s scenery, ski resorts, hunting activities, music festivals, and beer festivals.

A cool autumn breeze blew on the terrace; they chatted until noon.

Near twelve, Daniel invited Chen Yansen to a downtown restaurant to taste local specialties.

In the afternoon, Chen Yansen bid farewell to Daniel and drove to the Gotland Province’s Götene Hunting Grounds.

Technically, he and Song Yuncheng lacked hunting permits, but with enough money, loopholes existed. Under the hunting club’s arrangement, led by a professional hunter, Chen Yansen easily experienced the thrill of hunting.

Song Yuncheng held a rifle and, within two hours, shot three wild rabbits, then excitedly turned to Chen Yansen: “Let’s eat rabbit tonight?”

The girl’s eyes sparkled, her cheeks flushed.

These past few days—sea crab fishing, skiing, hunting, sea angling—each experience was entirely new to her.

“Sure,” Chen Yansen nodded.

“By the way, I forgot to ask—did Universal and Apple really discuss exclusive licensing?” Song Yuncheng asked, holding the rabbits.

“I don’t know. I just made it up,” Chen Yansen shrugged, speaking honestly.

“I knew it,” Song Yuncheng smiled faintly, looking unsurprised.

Her English was good, but Chen Yansen and Daniel’s conversation was full of industry jargon; though she didn’t grasp every detail, she understood the gist.

On the other side.

After Chen Yansen left Stockholm, Daniel immediately launched an investigation and soon learned from an Apple marketing employee that Universal Records staff had indeed visited Apple’s headquarters in September.

Whether it was for copyright cooperation, however, remained unclear.

Daniel thought for a moment, narrowed his eyes, and a cold glint flashed—he was certain Universal was scheming behind the scenes.

After careful consideration, he decided to accept investments from Senlian Capital and Fidelity Capital—get the money first, then weather the current crisis.

Chen Yansen didn’t know that his offhand remark, combined with Daniel’s own imagination, had actually sealed the deal.

As he prepared to return home, Daniel called: “Chen Yansen, I accept Senlian Capital’s investment. I agree to your $2.8 billion valuation.”

Chen Yansen paused, then quickly adjusted his expression and replied with a smile: “Then let’s meet this afternoon to sign the investment intent agreement. After our finance and legal teams complete due diligence, we’ll sign the equity transfer agreement?”

“OK, no objections,” Daniel agreed readily.

Chen Yansen exchanged a few more words and hung up.

For overseas investments exceeding $100 million, approval from higher authorities was required.

Thus, investing in Spotify would be a long process—from core data review to phased payments—taking at least three to five months.

On his final afternoon, Chen Yansen signed the equity transfer intent agreement with Daniel at Spotify’s headquarters.

$140 million for 5% of Spotify’s equity!

If he continued investing before the IPO, this stake could generate over $7 billion in returns for him.

Chen Yansen returned to Xu City on October 9.

At this moment, the group-buying, food-delivery, and ride-hailing markets had been fighting so fiercely since the National Day holiday that their brains were nearly battered.

Chen Yansen first returned to Room 0418, then drove a Bentley Mulsanne toward the tech park.

As soon as he entered the building, Cheng Wei’s call came in.

“Boss, daily subsidy spending is around $40 million. Should we pause temporarily?”

Cheng Wei sat in his office, eyes bloodshot, under immense pressure.

Since October 1, KuaiDi and DiDi’s subsidy wars had intensified; now, regardless of new or existing users, each platform offered three daily first-ride discounts, with subsidies ranging from 10 to 14 yuan depending on local taxi base fares.

At the current loss rate, even KuaiDi’s deep pockets might not last until December.

JD.com, Suning, and Gome’s home appliance price wars were loud but had little impact on users.

But KuaiDi and DiDi were genuinely giving millions free rides across five northern provinces and seven eastern provinces plus one city.

Weibo, WeChat, forums, campus networks, and Tieba were flooded with guides on how to use free ride-hailing apps.

Li Yan was paralyzed with fear; he knew expanding further would benefit Didi, but he dared not act rashly.

Thus, every expansion of Didi’s service area required an additional several million yuan in subsidies.

“How much cash do we have left?” Chen Yansen asked.

“1.94 billion,” Cheng Wei immediately replied.

“Spend it all first—I’m confident Li Yan won’t last long,” Chen Yansen said firmly.

“Understood, boss,” Cheng Wei gritted his teeth and agreed.

“Reinstate promotions like recharge cards with greater intensity; right now, Kuai’s top priority is capturing market share—profitability is not a concern.”

As Chen Yansen stepped into the elevator, he added one more thing.

He had pulled in Tencent, Ali, Huaxin, Huake, DST, and Goldman Sachs onto Kuai’s big ship, all to reduce competition and maintain ample funding.

In terms of boldness and spending capacity to seize territory, Li Yan couldn’t match him.

Cheng Wei acknowledged and reminded Chen Yansen that two electronic contracts for Kuai were waiting for his approval in his email.

“I know,” Chen Yansen said, then tapped the end-call button.

*Ding!*

The elevator doors slowly opened.

Chen Yansen stepped out, pushed open the office door, and walked straight in.

The money tree on the desk grew lush and vibrant, every leaf plump and rounded.

Not long after sitting down, Zhang Yinjia and Zhou Mingxuan from Orange Pay arrived upon hearing the news.

“Boss, the Yu’e Bao project is ready; customer service training and market promotion are nearly complete—users are waiting for Orange Pay 2.1’s release.”

Zhang Yinjia reported with bright eyes and steady confidence.

“What’s the annualized yield over the past seven days?” Chen Yansen asked.

“Around 5.4% to 5.7%. As planned, we only show users an actual annualized yield of 4.9% to 5.2%; the 0.5% difference is project profit,” Zhang Yinjia replied.

This 0.5% spread was effectively a management fee charged to the fund company.

(End of Chapter)