King of Capital

Chapter 51 Blank Check
"By the way, one of my founder friends also likes sports cars. Maybe you and he will have something in common."

After a brief chat about sports cars to liven up the atmosphere, Jim Goetz, who knew what was going on, got right to the point.

Xie Jingxing asked in cooperation: "Really? That's great. The founder friend you mentioned is also in the Bay Area?"

"His company is in Mountain View. You may have heard of his name, Jan Koum, the founder of WhatsApp."

Jim Goetz is helpless. Nowadays, most people who come to communicate with him do so for WhatsApp. This makes him happy and distressed. An excellent investor should not have his only masterpiece overshadow his own brilliance.

Xie Jingxing put down the teacup in his hand and sat up straight. He was silent for a moment and said seriously: "In fact, we are here for him. We believe that there is an opportunity for in-depth cooperation between WhatsApp and Tencent Group."

"uh-huh?"

Goz was prepared and waved his hand to indicate that he could continue.

“I heard that WhatsApp is interested in acquiring Vtok, a video and voice communication product owned by SkyMobius. I think this is great. With the iteration of smartphone technology, simple text messages cannot meet people’s needs for instant messaging.”

Xie Jingxing said slowly and organized his words: "Kum's decision to acquire this company is obviously to meet WhatsApp's technical reserves."

"In China, Tencent has two instant messaging products with over one billion users combined, both of which have complete voice and video functions. From a technical perspective, Tencent is currently the world's number one. If WhatsApp wants to do voice and video, why wouldn't it choose to cooperate with Tencent?"

Goz perked up. A few months ago, Sequoia's additional investment in WhatsApp was for the purpose of acquiring Vtok. The young man in front of him was really well-informed. His words and deeds were consistent with his external image, young and confident.

"Voice and video are not difficult to implement on the technical level. Computer science majors and fresh graduates are equal to Tencent." He tentatively said indifferently.

At the same time, he acknowledged that Tencent is the world's number one in this field. He has a master's degree in computer science from Stanford and has started an Internet business.

Therefore, I know better than most people how difficult it is to operate an instant messaging product with hundreds of millions of daily active users. There are hundreds of mobile phones and computer models, tons of information reserves, and constant updates and optimizations...

Just thinking about it makes my scalp tingle. Even if Tencent is not the world's number one, it is still a monster.

Xie Jingxing had a special chat with experts and professors from the School of Computer Science at Fudan University. He did not go into detail and jumped to the second point: "China has a population of 14 billion, and the smartphone dividend is expanding. In a few years, WeChat will be installed on every smartphone in China."

“WeChat has no rivals and can optimize its products and experiment with various technologies as it pleases without worrying about users switching to its competitors.”

Goz frowned and said nothing. He hated the Great Wall. Or rather, as a corporate and financial player with global ambitions, no one would like to erect high walls to block access to a market of more than one billion people.

But we have to admit that it is really great from Tencent's perspective. Nowadays, every update of WhatsApp has to be handled with great care for fear of being overtaken by competitors. Koum is even studying to find a certain region around the world as a testing ground for each product update.

For the time being, we are focusing on India for a simple reason - there are a lot of people and users. If we were to go to shitty places like Norway and Iceland, the experimental feedback would be meaningless.

Moreover, the Asian market as a whole is very dynamic. Neon Line, South Korea's KaKaoTalk and Viber, plus the overseas version of WeChat are competing in Asia outside the Chinese mainland market. The growth momentum is stronger than one another, and the overseas version of WeChat appears to be the weakest one.

If WhatsApp is interested in the Asian market, which accounts for more than 50% of the world's population, it must enter the fray now.

So to sum up, Tencent is indeed a high-quality strategic partner, both in terms of technology and market capture.

"Excuse me, but does WhatsApp want to enter China?" Xie Jingxing made a big move.

Su He, who was sitting next to him, changed his expression slightly, coughed lightly and added: "The way to cooperate with WeChat."

"This is a very creative proposal. WhatsApp has always adhered to the entrepreneurial philosophy of openness, multi-source and integration..." Goz couldn't sit still, but didn't want to express his opinion easily, so he hesitated and played Tai Chi.

Xie Jing Xing did not give him a chance, shook his head and skipped the topic, and continued to talk about it: "WeChat will be permanently free for every user in the future. Of course, there will be no advertisements. WeChat has found a new profit model, and it is about to change the rules of the game for instant messaging products."

"Free forever?" Goz's attention was instantly diverted.

Xie Jing Xing laughed: "Sorry, this is a secret, but I think it won't be long before you can witness it with your own eyes."

Asian market + technical support + profit model, as well as the unreachable but irresistible Chinese mainland market.

Goz unconsciously clenched his teacup. Google withdrew sadly, Yahoo was acquired by Alibaba, and Facebook came to an abrupt end... All global giants were unable to make it in that land, but as Xie Jingxing said, that land had the most exaggerated economic growth rate in Asia and the most outrageous market dividends.

The most important thing is that it is a thriving market with a unified cultural and educational background and a stable and harmonious social environment!

"Okay, cooperation. How does Tencent want to cooperate?" Goz asked, suppressing his negative emotions.

Today's meeting was entirely out of respect for Professor Joseph Stiglitz. He didn't expect to get any valuable cooperation proposals. WhatsApp is currently one of the most eye-catching startups in Silicon Valley, and countless people have taken the initiative to give money to it.

An investment bank from China is not competitive at all.

But such an uncompetitive investment bank came with full sincerity. Without prior mental preparation, he instinctively resisted expressing his attitude. Any words he said today could become a weapon to lower the price during subsequent cooperation negotiations.

Reason told him that he had to show his attitude and not miss it. As the only venture investor of WhatsApp, when this enterprise is great enough and as dazzling as the sun, he will be worshipped by thousands of people - Godfather, he likes this honorific title.

"Investment, mergers and acquisitions, or strategic cooperation are all possible. It depends on what you and Koum think." Xie Jingxing hinted vaguely.

Goetz pointedly asked, "Merger?"

"I think the deepest level of cooperation should be to become husband and wife, never leaving each other and sharing weal and woe. The priests all say so." Xie Jingxing joked.

Goz looked scrutinizing: "WhatsApp is expensive."

"This is something Tencent should worry about. If you and Koum are willing, Juntai Securities can provide services for WhatsApp. I personally think it is worth a valuation of tens of billions of dollars." Xie Jingxing painted a rosy picture from a third-party perspective.

Gotz didn't comment, but smiled and changed the subject: "To be honest, I'm very interested in you. You look like you just graduated from college. Are you going to work at Sequoia?"

"To be honest, my family has a family office worth more than one billion dollars, and I am trying to take control of it. If everything goes well, the cooperation between Tencent and WhatsApp will be a wonderful experience in my life, the last time I work for someone else," Xie Jingxing said frankly.

“…Excellent young man.”

Goz was speechless, and forced himself to regain the situation and said: "I am happy to try to help you realize your life plan and make this wonderful journey even more dreamy."

"Thank you very much. I am also willing to let this cooperation become a part of the beautiful memories of your career." Xie Jingxing stood up and stretched out his hand.

Goz then stood up, held out his hand, smiled and said, "Let's set up a time so Koum and Tencent managers can sit down and talk."

"Mr. Jim, I suggest we arrange a time as soon as possible." Su He expressed his opinion with a smile.

After the business was settled, Goz relaxed and praised the gentleman generously, saying, "Thank you for the reminder, ma'am. You are an excellent assistant."

"..."

Xie Jingxing's mouth twitched and he was having a hard time holding it in. Su Heyun smiled calmly and escorted Gozili out of the restaurant.

She didn't have time to get upset about trivial matters. The conversation just now seemed to be going smoothly, but in fact it was far beyond her expectations.

With a very high return on investment and a great company, the story was told and all the pie was executed as expected. The serious problem that exceeded expectations was:

First of all, there is no need to even think about opening the domestic market to WhatsApp; secondly, during the expected dialogue, Goz should be very concerned about the certainty of the transaction. No matter how bright the future prospects are, the risk of cooperation failure due to external factors is visible to the naked eye.

In the end, Goz didn't mention Xie Jingxing and didn't say anything. Su He made small gestures to hint at him several times, but the latter remained indifferent.

"First, there is no company in this world that does not want to enter the Chinese market. Even if they know it is a blank check, they still want to give it a try." Xie Jingxing explained.

These days, due to the existence of the Great Wall, many people in China underestimate the degree of international capital's desire for the huge domestic market.

It was not until ten years later, when domestic capital going to India was cheated countless times but the "cheap bones" who only cared about eating and not being punished, that everyone saw the subjective initiative of capital in the face of a huge market.

With a profit of more than 300%, capital is willing to sell its life for it. The domestic market has a profit of more than 300%.

Regardless of whether Su He accepted this statement or not, Xie Jingxing continued to explain: "Second, we all know that the transaction risk comes from the US government. If he asks questions that we can't answer directly, then should we bring Tencent and WhatsApp together to talk?"

Goz was blinded by the empty promises of the domestic market, and so was Tencent.
Everyone is trying to win a one in a million chance. In this case, it is really redundant to talk about "transaction certainty". All we need to do is to do our best.

Of course, if Goz had not been impressed by the domestic market just now and asked about the trading risks, he would have had to answer truthfully and speak some weak and repetitive words.

"I'm just improvising." Xie Jing Xing made a bear-like gesture with his hands spread out.

Su He pursed his lips and pretended not to hear. Judging from the result, he won again, a complete victory!

Deal-making is the first key node in the M&A process. All things are difficult at the beginning, just like the first meeting of a blind date is halfway done. The subsequent discussions on whether the couple likes each other, personal conditions, and gift and dowry are all possible.

Su He decisively called back to China and woke up Liu Chih-Ping late at night to discuss the progress. According to the original plan, Liu from Tencent would be fully responsible for the project. Next, he would come to the United States in person to meet Jan Koum for a blind date and discuss marriage.

"It's going so smoothly, it's a little unreal." Xie Jingxing said on the way back to the hotel.

Su He frowned and said coldly: "Do you want me to praise you?"

"Not necessarily, but you can buy me a drink." Xie Jingxing took the initiative to ask for a favor.

(End of this chapter)