Chapter 319: Over 60-Fold Investment Return! Chen Yansen: I Just Made It Up Off the Cuff!

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

After eight months of rapid expansion, re-evaluated based on current market share and number of paying users, the valuation stands at around 2.5 to 3 billion US dollars.

Compared to the 26 billion US dollars listing valuation six years later, there is room for eight or nine times growth; compared to the peak market value of 149 billion US dollars, there is even more than a sixty-fold profit opportunity.

For Chen Yansen, investing in Spotify would, first, yield substantial investment returns, and second, fill the application ecosystem gap for the Alexa smart speaker.

Moreover, Daniel Ek's pricing standards are not high; if it were Apple's iTunes, Cook might charge him 30% in music licensing fees.

Therefore, Spotify at this moment clearly possesses investment value!

Chen Yansen looked at Daniel, deliberately showing hesitation on his face; after pondering for over ten seconds, he slowly spoke:

"Senlian Capital has not yet ventured into overseas investment fields. I personally see a bright future for Spotify, but the premise is solving a series of problems: high licensing costs, vague profit direction, sluggish user growth, and low paid conversion rates."

Profit difficulties for a music software are enough to make 99% of prospective investment institutions hesitate to proceed.

After all, the core demand of investors is profit, not paying out of their own pockets to fund a entrepreneur's dream.

The licensing dilemma, like a quagmire, has tightly entangled Spotify.

Daniel nodded slightly and sat upright, replying: "Mr. Chen, I admit that licensing fee expenditure is indeed Spotify's biggest obstacle to profitability.

For this reason, I have communicated with record companies such as Universal, Sony, and Warner, preparing to optimize the royalty payment model, charging based on actual play counts, thereby reducing licensing costs for non-hit songs."

"Will Universal, Sony, and Warner agree?"

Chen Yansen asked back with a smile.

Who would spit out meat already at their mouth?

The more users Spotify has, the higher the royalties for record companies; if Universal, Sony, and Warner agreed, that would be seeing ghosts!

The other party used the word 'preparing,' and no contract has been signed; this is purely wording thought up temporarily for financing.

Seeing that Chen Yansen did not take the bait, Daniel sighed slightly; Asian investors are mostly of the shrewd and rational type.

Three years ago, Li Ka-shing's Horizon Capital participated in Spotify's B-round financing. During negotiations, the Li family's financial analyst presented a valuation algorithm model that drew attention, forcibly driving the offer down by 20 million US dollars.

In his view, even though Chen Yansen did not have professional financial and legal personnel accompanying him, the other party was obviously a shrewd businessman, hard to fool.

After pondering for a moment, Daniel looked at Chen Yansen and said: "If Spotify is dragged down by licensing fees, Universal, Sony, and Warner will lose 500 million US dollars in earnings annually. As Spotify's market share continues to rise, this figure will continue to expand, even reaching 2 billion or 5 billion US dollars. They will not sit idly by while Spotify declines."

The three major record companies might make concessions, but exactly how large the space is remains unknown.

His business sense and operational capabilities are not bad, but limited by the high licensing fee expenditure in Europe and America, after several rounds of financing, the founding team's shareholding in Spotify has become smaller and smaller.

Before this, he had successively contacted investors from Gao Sheng, Fidelity Capital, and Coca-Cola, but after a series of conversations, he found that the highest offer was only 2.8 billion US dollars, far from his psychological bottom line.

Therefore, he tentatively inquired about Chen Yansen's investment intention, wanting to introduce a non-European-American investor to disperse the investors' shareholding ratio and ensure his controlling rights.

Chen Yansen smiled and said noncommittally: "Perhaps."

"Spotify is preparing for its E-round financing..." Daniel simply said directly.

"You want me to invest in Spotify?" Chen Yansen, not waiting for him to finish, asked back with a surprised expression.

"That's right! Of course, whether cooperation can be achieved depends on Mr. Chen's willingness," Daniel replied.

"What is your psychological expectation?" Chen Yansen leaned back, picked up the hot coffee on the table, took a sip, and asked.

"3.4 billion US dollars. If Chen Yansen is interested in investing, I am willing to give up 5% equity."

Hearing this, a trace of joy unconsciously appeared on Daniel's face, and he quickly replied.

"Too high. Do you know what the usual valuation is for a music software in China with 20 million daily active users and 5 million paying users? At most 300 to 500 million US dollars."

Chen Yansen shook his head slightly and spoke, asking and answering himself.

"But Spotify faces the global market; the potential is different. Once successfully operated and listed, its future market value will not be less than 10 billion US dollars."

Hearing the words '300 to 500 million US dollars,' Daniel instantly panicked, leaned forward, and immediately responded.

"I heard Universal Records is in secret talks with Apple for an exclusive licensing cooperation. If Spotify is unable to pay licensing fees, the three major record companies might just wait for Spotify's capital chain to break, then take the opportunity to acquire it at a low price."

Chen Yansen put down his coffee cup and said with a light laugh.

"No, impossible!" Daniel, his face pale, denied it in disbelief.

"Maybe it's false news; it can't be taken seriously." Chen Yansen hummed, appearing casual and unconcerned.

But Daniel's state of mind was already chaotic; fearing that Universal, Sony, and Warner would backstab him, plus the unreasonable price-cutting behavior of investors, for a moment, he actually believed it by five or six tenths.

"The 5% equity ratio is fine, but I cannot approve a valuation of 3.4 billion US dollars. Below 3 billion US dollars, there is still a possibility of cooperation."

Chen Yansen continued speaking.

"An offer of 3 billion US dollars is too low; the figure given by Gao Sheng is above 3 billion US dollars." Daniel immediately refused.

"Then forget it. Let's put the investment matter aside for now and talk about the cooperation between the Alexa smart speaker and Spotify." Chen Yansen changed the topic concisely and decisively, without the slightest hesitation.

He would never believe the other party's nonsense!

Since Gao Sheng Capital was willing to give a valuation offer exceeding 3 billion US dollars, why did Daniel still have to suck up to him seeking investment?

What for?

Such arguments might fool investors who just entered the industry, but in Chen Yansen's eyes, they were nothing but lies full of loopholes.

Daniel's tone stalled; he didn't expect Chen Yansen to not follow the routine at all.

So he let out a dry laugh and could only follow the other party's topic, chatting from the smart speaker's application ecosystem to the mobile phone market in Eastern Europe, and voluntarily stating that he possessed some operator channel resources in Germany, Britain, France, and other regions, which could provide help when Sister Chengzi phones opened up the Western European market.

"Thank you." Chen Yansen thanked him calmly.

Daniel held it in for a long time, but finally couldn't resist, lowering the offer to 3.2 billion US dollars.

"Each side takes a step back; 2.8 billion US dollars!" Chen Yansen said indifferently.

Daniel was stunned; if each side takes a step back, shouldn't it be 3 billion US dollars? Spotify clearly took two steps back!

He thought for a moment and said: "The minimum is 3 billion US dollars."

"Let's talk next time." Chen Yansen waved his hand and decisively refused.

His investment intention for Spotify was not strong; if the price was low, he would invest on the spot; if the price was too high, giving it up didn't matter.

A valuation of 2.8 billion US dollars is on par with Fidelity Capital and 100 million US dollars higher than Coca-Cola; it cannot be called a high price.

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

After that, he stopped dwelling on the investment and cooperation matters, and instead introduced the scenery of Stockholm, ski resorts, hunting activities, as well as music festivals and beer festivals to Chen Yansen and Song Yuncheng.

The autumn breeze on the terrace was slightly cool, and the group chatted all the way until noon.

As it neared twelve, Daniel invited Chen Yansen to a restaurant in the city to sample the local specialties.

In the afternoon, Chen Yansen bid Daniel farewell and drove toward the Gothaland Province's Gotestop Hunting Grounds.

Logically speaking, he and Song Yuncheng didn't have hunting permits, but as long as one was willing to spend money, there were loopholes to exploit. Under the arrangements of the hunting club, led by a professional hunter, Chen Yansen easily got a taste of the thrill of the hunt.

Song Yuncheng, carrying a hunting rifle, had shot three hares in just two short hours, then turned to Chen Yansen with an excited face: "Shall we eat rabbit tonight?"

The little girl's eyes were shining, her cheeks flushed red.

The experiences of these past few days were extremely unforgettable for her—going out to sea to catch crabs, skiing, hunting, sea fishing—each one was something she had never experienced before.

"Sure." Chen Yansen nodded in reply.

"Oh right, I forgot to ask—is Universal Records really in talks with Apple about an exclusive licensing deal?" Song Yuncheng asked curiously, holding the rabbits.

"I don't know, I was just making it up off the top of my head." Chen Yansen shrugged and answered honestly.

"I knew it." Song Yuncheng smiled lightly, wearing an expression that said 'just as I expected.'

Her English was quite good, but the conversation between Chen Yansen and Daniel was peppered with too many industry terms; although she couldn't understand everything clearly, she could still grasp the general gist.

Meanwhile.

After Chen Yansen left Stockholm, Daniel immediately began investigating, and quickly learned from a person in Apple's marketing department that a Universal Records staff member had indeed visited Apple's headquarters building in September.

As for whether it was about copyright cooperation, that remained unclear.

Daniel thought for a moment, his eyes narrowing slightly, a cold glint flashing through them, and he became convinced in his heart that Universal Records was up to something behind the scenes.

After weighing the options repeatedly, he decided to accept the investments from Senlian Capital and Fidelity Capital—get the money first and get through the current difficulties before anything else.

Chen Yansen had no idea that his offhand remark, combined with Daniel's own wild imagination, had actually brought this investment deal to fruition.

Just as he was preparing to head back home, Daniel's call came in: "Chen Yansen, I'm willing to accept Senlian Capital's investment, and I also recognize the offer of 2.8 billion US dollars."

Chen Yansen was stunned for a moment upon hearing this, but he quickly adjusted his mindset and replied with a smile: "Then let's meet this afternoon, sign the investment intent contract first, and after the company's finance and legal teams complete the audit work, we'll formally sign the equity transfer agreement?"

"OK, I have no objections." Daniel agreed readily.

Chen Yansen exchanged a few pleasantries and hung up the phone.

Investing in overseas projects with funds exceeding 100 million US dollars requires reporting to the higher-ups for approval.

Therefore, the process of investing in Spotify is very long—from core data review to phased payments, it can't be wrapped up in less than three to five months.

On the last afternoon, Chen Yansen signed the equity transfer intent agreement with Daniel at Spotify's headquarters.

Exchanging 140 million US dollars for 5% of Spotify's equity!

As long as he continued to invest before the IPO, this equity stake would create over 7 billion US dollars in returns for him in the future.

It wasn't until October 9th that Chen Yansen returned to Xu City.

At this moment, the group buying, takeout, and ride-hailing markets, after the National Day holiday showdown, had nearly beaten each other's brains out.

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

Just as he entered the company building, Cheng Weixing's call came through.

"Boss, the daily subsidy costs are burning through about 40 million right now—should we temporarily stop?"

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

From October 1st onward, the subsidy battles between Kuaidi and Didi had grown increasingly fierce. Now, regardless of new or existing customers, each platform offered three first-ride discount deals daily, and depending on regional differences in taxi base fares, the subsidy amounts fluctuated between 10 and 14 yuan.

At the current rate of losses, even with Kuaidi Taxi having abundant capital, it probably wouldn't last until December.

The home appliance price wars between Jingdong, Suning, and Gome were all thunder and no rain—users felt nothing at all.

Yet Kuaidi and Didi were genuinely giving tens of millions of people free rides across the five provinces of North China and the seven provinces and one municipality of East China.

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

Li Yanhong was bleeding badly. He knew full well that continuing to expand outward would benefit Didi Taxi, yet he didn't dare act rashly.

Therefore, every time Didi Taxi expanded its service area, the subsidy costs had to increase by several million.

"How much money is left in the account?" Chen Yansen asked.

"1.94 billion." Cheng Weixing answered immediately.

"Spend this money first. I estimate Li Yanhong won't be able to hold out much longer." Chen Yansen said with a tone of certainty.

"Understood, boss." Cheng Weixing gritted his teeth and agreed.

"Activities like top-up cards can be relaunched with greater intensity. Right now, the most important thing for Kuaidi Taxi is to seize market share—profitability is not a consideration for the time being."

Chen Yansen walked into the elevator and added another sentence.

He had pulled in Tencent, Mama Ali, Huaxin, Huake, DST, and Gao Sheng, getting them all aboard the Kuaidi Taxi ship, all for the sake of reducing competitors and maintaining sufficient capital.

When it came to the boldness and ceiling of burning cash to grab territory, Li Yanhong couldn't compare to him.

Cheng Weixing acknowledged, and reminded Chen Yansen that there were still two electronic contracts for Kuaidi Taxi in his email awaiting his approval.

"Got it." After saying this, Chen Yansen pressed the hang-up button.

*Ding! *

The elevator doors slowly opened!

Chen Yansen walked outward, then pushed open the office door and strode in.

The money tree on the desk was growing extremely lush, verdant and thriving, every single leaf plump and full.

He had barely sat down when Sister Chengzi Payment's Zhang Yinjia and Zhou Mingxuan came over upon hearing the news.

"Boss, the Yu'e Bao project is ready. Customer service training and market promotion work are basically complete. Users are all waiting for the release of Sister Chengzi Payment version 2.1."

Zhang Yinjia reported with bright eyes, steady and forceful.

"What is the annualized return rate over the past seven days?" Chen Yansen asked.

"5.4% to 5.7% or so. According to the original plan, we only show users an actual annualized return of 4.9% to 5.2%, with 0.5% kept as project profit," Zhang Yinjia replied.

This 0.5% spread is, in fact, the management fee collected from the fund company.

(End of chapter)