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I'm not sure what distinction you think you're making. They bought a lump of the company at whatever valuation and that's termed an "investment". However my poi
by s_dev 5y ago
I'm not sure what distinction you think you're making. They bought a lump of the company at whatever valuation and that's termed an "investment". However my point is that I don't suspect they're strictly after a return on investment here.
- ABS 5y agono, they very explicitly co-lead the round with Willoughby Capital and the participation from Tiger Global, Gangwal, Moore Capital, Deimos, and Fasanara Capital. Buying something to own/control it and investing in something for an expected future return are very, very, extremely different things and even more so in this context. Both formally (terms and conditions signed by all the parties involved, and there are many here and it's Series B, the clauses regarding equity, control, debt, exits and so forth) and practically.
- oefrha 5y agoIf you can’t see a distinction here, then Tencent was “acquired” by Naspers of South Africa in 2001 by your logic.
- jasode 5y ago>I'm not sure what distinction you think you're making. They bought a lump of the company at whatever valuation and that's termed an "investment". However my point is that I don't suspect they're strictly after a return on investment here. The distinction is that "acquire" means controlling interest. Investing $497 million when the valuation is over $1 billion means... (doing the math) ... Tencent has less than 50% ownership. At this point, Tencent only has an investment and not a controlling interest. Therefore, Tencent did not acquire Scalapay (yet). This isn't being pedantic about semantics. Instead, it's being very clear about who controls Scalapay based on how much ownership percentage was purchased. Another example of the difference... in 1997 when Microsoft invested $150 million in Apple, it did not purchase enough ownership % to consider it an acquisition. The $150m is a lot of money but MS didn't acquire Apple with that transaction. (https://www.google.com/search?q=microsoft+invests+%24150+million+in+apple+1997 https://www.google.com/search?q=microsoft+invests+%24150+mil...) EDIT reply to: >Valuation has nothing to do with controlling interest. They are unrelated. Setting aside a multi-class stock arrangement with 10x voting rights which would be unusual for non-public company at this early stage because it requires approval by the previous investors & founders, the post-money valuation is mathematically related to the ownership percentage purchased -- and therefore determines if there's a controlling interest.
- IncRnd 5y ago> Investing $497 million when the valuation is over $1 billion means... (doing the math) ... Tencent has less than 50% ownership. > This isn't being pedantic about semantics. You are quite simply wrong. Valuation has nothing to do with controlling interest. They are unrelated. A company can have 100 shares, each worth $1, and be valued at $2,000,000,000.