From LeTV to LeEco: A video website grows into a tech empire with global ambitions

Faraday Future, a California-based EV startup, unveiled its batmobile-like concept car at CES 2016 in Las Vegas, causing a media storm. As it turns out, one of Faraday’s key investors is the Chinese company Leshi Internet Information & Technology, or LeTV for short.

Electric vehicle production is only one of LeTV’s many arms of vertical integration. In fact, the behemoth changed its name to LeEco in January to reflect its current business scale and its plans to enter the U.S. and Indian markets.

Founded in Beijing in 2004, LeEco’s online platform, which has one of the most comprehensive entertainment libraries in China, provides original internet dramas, TV dramas, movies, variety shows, concerts and sports games. Its Le4K channel has more than 100 movies and TV dramas in 4K with a growing library of UHD content.

Besides gaining the title “China’s Netflix” by providing video-streaming content, LeEco has branched out to smart TVs, set-top boxes, smartphone manufacturing, an e-commerce platform where it sells its own electronics, VR headsets and content production. It is also entering the internet finance and cloud computing sectors.

In August 2010 LeEco, then LeTV, launched its IPO as an internet streaming company and the corporation was listed on the Shenzhen Stock Exchange. Its market capitalization was around USD 21 billion, Chinese tech media site Huxiu reported last May. Later on, the corporation restructured and expanded into different divisions. Not all of the the company subsidiaries went public.

Jia Yueting is founder and CEO of LeEco. (Photo from NetEase)
Jia Yueting is founder and CEO of LeEco. (Photo from NetEase)

The company has experienced explosive growth in the past two years under its founder and CEO, 42-year-old Jia Yueting. After running a small technology company in his hometown Shanxi in central China for two years, Jia headed to Beijing to found his dream company LeTV in 2004. Jia crafted a strategy and built an ecosystem for his empire. Starting from video streaming, the company moved into producing content and apps and also expanded to manufacturing smart devices.

In January, the company’s new president Liang Jun laid out LeEco’s upgraded ecosystem and overall strategy. The company will revolve around its one million registered users to provide three key products: smartphones, smart homes and smart cars, and application services based on cloud computing and big data. The e-commerce platform and its video, music and sports websites are tools to sell their products and serve their users with all kinds of content.  

LeEco has big plans for the future. Le Holdings Vice President Zhang Zhiwei said Le Holdings (Global) plans to launch its IPO in 2022, Sina Tech reported. He added that the company’s unlisted core businesses and the company’s core assets will go public, including LeCloud, LeSports, LeCar and more.

To date, the company has accelerated investment and development in sectors related to its ecosystem.

LeEco's Letv X3-55 Pro 4K TV (Photo from lemall.com)
LeEco’s Letv X3-55 Pro 4K TV (Photo from lemall.com)

Smart TV, one of the company’s key sectors, was established in 2013. The company has released several models ranging from 40 inches all the way to 120 inches, with 3D and 4K capabilities in some models. As of October 2015, LeEco has sold nearly four million TV sets altogether, according to Chinese news outlet Sina.com.

In December 2014, the company’s sports division LeSports was spun off. It raised RMB 800 million (USD 122 million) in its first round of funding in May 2015. The major investors include Alibaba-backed Yunfeng Capital and Prometheus Capital. This division is in charge of sports content and sporting events. It faces competition from Tencent’s video channel and PPTV, a Chinese video streaming company.

Similarly, the company has separated its music division by starting a music company in Hong Kong in March 2015. Yin Liang, the CEO of LeTV Music, said they will begin a round of funding in the first quarter of 2016, Chinese tech media iFeng.com reported last December.

LeEco's first generation of smartphone Le 1 was launched in April 2015. (Photo from Sina.com)
LeEco’s first generation of smartphone Le 1 was launched in April 2015. (Photo from Sina.com)

LeEco entered the smartphone business last April. It released phones in two series: Le 1 and Le Max. It caught attention from gadget fans recently, after it launched the world’s first phone to run Qualcomm’s Snapdragon 820 chipset at CES 2016. Beijing Business Today reported that the company has sold more than four million smartphones in less than a year in 2015. Feng Xing, LeMobile’s president, said the target for smartphone sales in 2016 is set for 15 million.

LeEco’s most recent move is building a team to enter the internet finance market by hiring banking execs. The company successfully wooed two finance heavyweights from the Bank of America Merrill Lynch and the Bank of China in August to join LeEco as senior VPs, Sina Finance reported. Around the same time, the corporation built a computing and big data center in Chongqing, southwest China, as its cloud computing division’s headquarters.

Despite the fact that LeEco has successfully built its billion dollar businesses in many promising tech sectors, the company has caused controversy by aggressively denouncing its competitors.  

After Apple announced its fourth generation of Apple TVs in September 2015, the company’s CEO Jia wrote on Weibo, China’s largest social network, “After Steve Jobs, Apple has not made any disruptive innovations. [I’m] disappointed.”

When LeTV launched its own smartphones Le 1, Le 1 Pro and Le Max last April, it released a video trailer insulting Apple’s iPhone for its regressive design and innovation. Jia also publicly criticized Xiaomi for its loose ecological structure and its lack of competitiveness. Industry analysts suggest that the company’s criticism of its competitors is also a marketing strategy for its own products. This tactic is also adopted by many other Chinese tech companies, notably smartphone maker Smartisan and security giant Qihoo 360.

The company has faced its share of financial challenges. Jia had to sell his stocks twice in 2015 to finance his organization’s listed arms, according to finance website iFeng.com. The first time was in June, when his LeTV shares were reduced to 3,524 million shares and he cashed out with nearly RMB 2.5 billion. Then in October, he sold another 5.39% of his shares. He currently holds 36.79% of shares in LeEco. Jia reportedly loaned the money with no interest to the corporation to relieve its financial pressure.

(Top photo from NetEase)

AllTechAsia Staff

AllTechAsia is a startup media platform dedicated to providing the hottest news, data service and analysis on the tech and startup scene of Asian markets in English.

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