(Yicai Global) Sept. 20 -- Mr. Jia Yueting, CEO of LeEco Holding Group, said yesterday its LeEco Supercar has concluded its first round of fund-raising of USD1 billion, meaning the LeEco Supercar can focus on its auto-making plan without financial worries. Investors include Yingda Asset Management Co. -- owned by the State Grid Corporation of China, Shenzhen Capital Group Co., Ltd. (the investment vehicle for the Shenzhen city government), Legend Holdings Corp. [SEHK:3396], China Minsheng Trust Co., Macrolink Group and Hongzhao Fund.
Mr. Jia also stated that LeEco Supercar has formed a value chain across the globe that covers the entire industry, with a presence in China, Europe and the US, where it employs more than 1,000 people.
Despite the company's frequent bids to press ahead with its auto-making plan, investors have questioned whether LeEco has sufficient funds to carry out the plan since its roll-out. Earlier, word came that the LeEco Supercar's first round of financing had just concluded, but nearly failed as only one investor, Legend Holdings, signed on.
LeEco's funding chains are very tight and its profitability is very weak, analysts said. In addition, LeEco's projects are almost all guaranteed by Mr. Jia himself and are thus quite risky. If financial problems arise, gaining access to Mr. Jia's guarantees would be almost impossible. Auto industry insiders have also expressed concerns over Internet companies' production of electric cars and the belief that such firms face the risk of competitive elimination.