The name LeEco shouldn’t ring a bell for the average consumer, but for those in the know, it’s another standout Chinese brand. And with a slew of Chinese firms around, that should say something as well.
The company, better known in China for its video services, made a splash internationally thanks to its smartphones, offering more affordable flagships than many other brands. However, the firm is also heavily focused on its Faraday Future electric car.
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Now, it appears that LeEco is in financial trouble, according to an internal memo written by co-founder Jia Yueting and obtained by Bloomberg.
Yueting said that the company was “experiencing a simultaneous time in ice and fire”, ostensibly referring to its growth and financial struggles. The executive added that he would cut his income to just one yuan (R2).
LeEco has branched out from video services to smartphones and even an electric car effort
“We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited,” read another excerpt.
The co-founder added that they would decrease subsidies for consumers and focus on existing businesses as part of its cost-cutting measures.
The executive noted that their ability to raise funds wasn’t strong.
“The scale of our external fundraising had trouble satisfying the demands of our rapid expansion.”
