Luo Yonghao’s AR venture project has completed angel financing with a total amount of 400 million yuan, led by Meituan.
Since June this year, Luo Yonghao founded the AR technology company “Thin Red Line”, which is a completely high-flying starting point in terms of financing.
The first choice is the oddly high valuation. At the beginning of the financing, Luo Yonghao valuation quoted 2 billion yuan, but after a series of twists and turns, it is now down to 1-1.5 billion yuan. But even so, also already belongs to the “super high valuation”.
From the primary market, it is clear that it is an angel round company, but the starting valuation has rushed to CD round or even Pre-IPO round; from the secondary market, taking 25 companies on the science and technology innovation board as reference, a company with a market value of 1 billion must have a net profit of at least 20 million yuan.
Secondly, the amount of financing is very high: the starting point is 400 million yuan.
What exactly does “Thin Red Line” do and how is it worth so much?
According to Luo Yonghao’s public disclosure, the company’s business is positioned as the “Apple of AR”: in the AR era, it is the first to make a 2007 iPhone+iOS thing. This includes 2 heavyweight products: one is hardware (AR hardware), such as glasses; the other is AR system, similar to the operating system of cell phones.
From the order of priority, Luo Yonghao will do the system first, then the hardware (after 5 years). Referring to the cell phone industry, any one of these two tracks of products made, may sprint trillion market value (refer to Apple, Google market value).
There are two core issues of entrepreneurial success or failure: one, is this an opportunity; two, is this your opportunity.
From Luo Yonghao’s past entrepreneurial history, his success or failure and the second question is more relevant. That is to say, whether Luo Yonghao can make, depends on who he is competing with.
Do hammer phone, Luo Yonghao in the opportunity to judge is accurate: 2010-2016 is the era of the Internet cell phone wind up, millet, hammer, small pepper, big cola ……
But he failed, one of the core reasons: he ran into Lei Jun in competition. Luo Yonghao is also a super entrepreneur, but he is weaker than Lei Jun in terms of team formation, supply chain, commercialization and other issues.
As a result, Internet cell phones have been winding up for 5-6 years, and eventually there is only 1 winner left – that is Xiaomi, which eats 100 billion yuan of market share in the cell phone industry every year (2017). And in 2016, Hammer Mobile’s revenue was only 809 million yuan – a complete loss of opportunity to beat Lei Jun.
Pencil Road believes that Luo Yonghao’s venture is the same: how it ends up depends on his competitors.
Let’s look at the short term first: Who are Luo’s competitors in the next 5 years? All companies that do AR systems.
What is the current competitive landscape of the AR system track?
Luo Yonghao has played a misaligned competition to reduce the competitive pressure. The law of development of any industry is “hardware first”, and Pencil Road found that: in the AR industry, the strategy of most giants is still “hardware first, then software”.