LeEco has reportedly scored $600 million in fresh funding to continue to build a media empire across its hardware platforms.
Reuters reported that the fund commitments came from 10 companies in LeEco’s homeland of China, and an initial tranche of $300 million will be delivered in the next two weeks. The announcement followed last week’s news that LeEco was facing a severe cash crunch after expanding too quickly in a variety of markets.
The Beijing-based firm is six years old, but burst onto the scene in the U.S. only last month when it hosted a high-profile coming out party in San Francisco. Strategy Analytics predicted recently that the company will ship 25 million smartphones this year, marking a 541 percent increase over last year.
LeEco is the world’s fastest-growing major smartphone vendor, according to the firm, and will be the 11th-largest vendor worldwide this year. LeEco entered the global smartphone market in 2015 before expanding into India the following year, and it is positioned to make a significant move in the U.S. in 2017.
Unlike some manufacturers of mobile devices, LeEco hopes to use its hardware business to grow a media empire. In addition to smartphones, the company produces TVs, electric cars, headphones and a connected bicycle.
LeEco CEO YT Jia wrote in a blog post last month that the company plans to employ 12,000 people in Silicon Valley. In July it announced the $2 billion acquisition of U.S. TV manufacturer Vizio, and it has also hired key former executives from Samsung and Qualcomm.
But founder Jia Yueting conceded recently that LeEco “got overstretched in our global strategy,” The Wall Street Journal reported earlier this week. Debut and venture funding have largely funded its massive growth, and its video site is LeEco’s only profitable business, according to the company.
Some analysts have predicted LeEco will likely have to streamline its business and refocus on a few key hardware and services markets to become financially viable. Indeed, its prospects in the global smartphone industry are far from certain: Margins from mobile hardware are notoriously thin for any player not named Apple, and LeEco is challenged on its home front by major players including Oppo, Vivo and Huawei.
Just as uncertain, though, is whether LeEco can elbow its way into the U.S. media market without carrier partnerships for its handsets.