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Chinese internet company LeEco announced Sunday that it landed RMB16.8 billion (US$2.4 billion) in fresh funding led by China’s real estate titan Sunac China Holdings Ltd. Sunac will become the company’s second-largest shareholder after the deal.

The company disclosed that Sunac will contribute RMB15 billion (US$2.1 billion) of the total funding broken into three parts:

  • RMB6.04 billion (US$875 million)  for 8.61 per cent of the company’s listed arm Leshi Internet from founder & CEO Jia Yueting
  • RMB7.95 billion (US$1.1 billion) for 15 per cent of Leshi Zhixin, the company’s television subsidiary, through transfer existing shares and expansion of share capital
  • RMB1.05 billion (US$152 million) for 33.5 per cent of Le Vision Pictures, LeEco’s film production unit

Hua Insurance and Leran Investment, a state-backed venture capital firm, were also part of the deal, injecting RMB400 million (US$57 million) and RMB1.43 billion (US$207 million) in the company, respectively.

Also Read: LeEco raises funding, reshuffles management amid cash crunch

The financing comes at a vital timing for the company, which has experienced two most troubled months after Jia confirmed November that it’s facing a major cash shortage due to overly aggressive expansion plans.

Jia, the 43-year-old tech mogul, has built his reputation as a capital-raising machine in China’s internet industry. Local media Yicai reported that the company has already raked in a whopping RMB80 billion (US$11.5 billion) funding as of November 2016, bankrolling a variety of businesses from smartphone, television, film production to cloud services.

Will the new funding solve the cash squeeze?

This hefty round would definitely ease the capital pressures the company has faced and to rebuild confidence in its investors, but is it big enough to fill in LeEco’s funding gap to the fullest? Jia’s answer for this question is affirmative.

“Apart from LeEco’s electric car business, the RMB16.8 billion (US$2.4 billion) funding is well enough to address all our needs to drive a smooth transition of the LeEco system strategy from the first stage to stage two,” said Jia.

Also Read: LeEco talks about its ‘overstretched’ overseas expansion

The transition would mark a shift from taking an all-out approach into every business on a shared loop ecosystem on the global level to achieving true eco chemistry between the seven sub-ecosystems.

In the second stage, creating revenues will be a key goal for the listed as well as the unlisted entities. China, the US, and India will be the primary focus of the company, said Jia in an internal letter released last November.

LeSEE launches A round financing

According to the funding plan, LeEco’s electric car division, SEE Plan (Super Electric Ecosystem Plan) also the biggest cash-burner, is not included in the current financing round. Jia said last week that they could put their cars into production with a further RMB10 billion (US$1.4 billion) round, adding that more funding is still needed since the project is larger in scale.

LeSEE already raised US$1.08 billion round in September last year from investors include Yingda Capital Management, China Communication Construction Ltd., and China Aerospace Science & Industry Corp, among others.

Also Read: A real disruptor or a big talker? The myth of LeEco

Together with the funding news, Jia announced the launch of its funding plan for LeSEE. “We are really looking forward that more investors with visions could join the LeSEE ecosystem. Some progress has been made recently and hopefully we could share more good news within one month,” he said.

The article Is LeEco’s 2.4B USD new funding enough to redeem the cash-strapped conglomerate? first appeared in Technode.