The billionaire who very nearly bankrupted a Chinese tech giant

Jia Yueting debuted Faraday Future’s FF91 at this year’s CES. Photo credit: Jia Yueting’s Weibo.

Thirteen years ago, Chinese entrepreneur Jia Yueting founded what is today known as LeEco – a sprawling business of TVs, smartphones, streaming video, and even electric cars. It made him a billionaire; one of China’s rag-to-riches legends.

However, Jia’s legacy at LeEco won’t be as rosy as the story of his rise. Earlier this week, the tech magnate resigned from his post as company CEO, following months of shrinking cash reserves and scandal. Top executives have abandoned Faraday Future, the Chinese tech company’s US self-driving car unit. In the span of just six years, the tech conglomerate has burned through more than US$7 billion, leaving its business units precariously strapped for cash.

“The philosophy of LeEco is either to be great or to die, but never to be mediocre,” was Jia’s cavalier response, in an interview with Chinese media.

Here’s a step-by-step look at how Jia turned LeEco into a multi-billion dollar business – and brought it dangerously close to the edge.

2004: Early mover in China’s paid video market

Jia began his empire with online video. In 2004, when he founded Le.com – the roots of his future tech conglomerate – few companies in China were streaming copyrighted movies and TV shows through a paid subscription model. Piracy was rampant. That meant that Jia’s company could obtain licensing deals at a relatively low price.

Le.com went public on the Shenzhen Stock Exchange in 2010. Today, it’s one of LeEco’s only profitable entities, according to LeEco’s head of corporate finance.

2011 to 2013: Selling hardware at razor-thin margins

LeEco prides itself on its array of online services: exclusive content, cloud services, music, and more. They’re part of the tech firm’s hardware bundling strategy, where subscriptions, paid content, and ads make up for the loss of selling hardware at near or below the cost of production. In LeEco’s media-centric approach, hardware – TVs, smartphones, even cars – are all channels for serving content.

The tech conglomerate began selling TVs as early as 2011. In 2013, LeEco jumped into the smart TV business, which tied in nicely with the company’s exclusive content offering. That year, Jia’s stake in his video streaming and smart TV business took his personal wealth to about US$3 billion.

2014 to 2015: The cash-burning begins

Matt Damon stars as a European mercenary in The Great Wall, a movie produced by Le Vision Pictures. Photo credit: The Great Wall.

Set on building an integrated system of hardware and content, LeEco went on a spending – and scaling – spree.

It entered the smartphone business with Le Phone in 2015 – though it never took off, unable to rival domestic competitors like Xiaomi and Huawei. From 2014 onwards, the tech giant also began producing smart bikes and virtual reality headsets. At the same time it started developing Tesla-rivaling cars.

In 2014, Jia began financing a US-based self-driving car company called Faraday Future. His content business also expanded into sports broadcasting that year with LeSports.

2015: Fundraising and selling shares to slow the hemorrhaging of funds

2016: LeEco’s breaking point

2017: Miraculous fundraising while LeEco continues to unravel