章 464: Chapter 464: This Will Be The Last Time
Massive funding was needed to compete with America's eBay.
eBay was already the leader in global e-commerce.
They had finished preparations to acquire EachNet, China's C2C leader, and were ready to enter the Chinese market this year.
If eBay merged with EachNet and entered the Chinese market no company could stop them right now.
Jack Ma needed money and I could provide plenty of it.
The answer came not from Jack Ma but from Chai Chongxin.
"We need at least fifty million dollars."
I turned to look at Chai Chongxin. He flinched but held my gaze steadily.
"At least implies it could be more, doesn't it?"
"That's right. I'm not sure if you're aware Boss but C2C markets require massive initial investment costs. For marketing and crushing competitors."
"I'm somewhat familiar with that. But fifty million dollars from the start… Chai Chongxin you're still in contact with Masayoshi Son aren't you?"
That amount was probably proposed by Masayoshi Son. Chai Chongxin didnt deny it.
"I'm responsible for Alibaba's finances. Even if you have priority I can't cut ties with other investors. We never know what might happen later. Jack Ma approved this too."
When I looked at Jack Ma he nodded in agreement.
"We had no choice."
"What do you mean no choice?"
"After your patron Vice Premier Wen Jiabao fell from power in the Communist Party Shanghai faction members started pressuring us. Masayoshi was the one who mediated with them."
Wen Jiabao's fall must have terrified them.
I let out a small sigh. It couldn't be helped.
People on the mainland would feel the changing political winds directly.
This was China's reality. To do business you had to be close to the Communist Party yet keep your distance…
"Of course we haven't accepted any investment. Masayoshi didn't make unreasonable requests either. He just asked for a chance if you refused to invest."
I understood it was an inevitable choice for Jack Ma.
But unlike Jack Ma Chai Chongxin could have different thoughts.
I planned to remind him of this point once more.
"I invested in Alibaba and you Jack Ma for the future. I believed in Alibaba's future and invested twenty million dollars when you had nothing. Yet I only received 34% equity. I also acquired Goldman Sachs' 15% stake."
In China foreign investors could hold a maximum of 49% equity in Chinese companies.
That would change later but for now that was the rule.
"So I hold all the foreign ownership quota. To get investment from elsewhere you'd have to dilute my shares. Is that what you're suggesting?"
I couldn't accept my shares being diluted due to their change of heart rather than my own choice.
I calmly warned Chai Chongxin not Jack Ma.
"This is the last time. You can do any business you want. But one thing – no investor enters Alibaba without my permission."
Silence fell across the spacious conference room.
"I own half the shares yet besides one financial director I haven't interfered with Alibaba at all. As you know I haven't touched anything except finances. I trust you so trust me too."
"…I'm sorry."
Jack Ma apologized bowing his head. Everyone else bowed too.
"Raise your heads. Not being in China doesn't mean I'm unaware of things. You all probably know that Wen Jiabao who you thought had fallen will become Premier right?"
There was no answer but everyone seemed to have guessed it.
These people who had to be most sensitive to the Party's moods couldn't not know.
"President Hu Jintao's era will begin soon. For at least ten years no one will be able to threaten Alibaba. So don't worry about politics focus on how to grow Alibaba."
"Understood."
"I'll invest. But now I can't receive more shares… that's the concern."
I could get more shares by using a Chinese proxy but there were no Chinese people I could trust.
"I'll invest whatever you need whether fifty million or a hundred million. So don't worry about it. Don't bow to other investors. I don't want to see you bowing to others."
Jack Ma apologized once more and I nodded.
"James will enter the country for Hu Jintao's inauguration. He'll attend the ceremony then come to Hangzhou. We'll sign the investment contract then. Until then end your relationship with Masayoshi. I roughly know what kind of moves he made. Remember James can do everything he can do better. Never waver."
I looked at Chai Chongxin with emotionless eyes as I spoke.
"Do you understand Chai?"
"…Yes I understand."
Chai Chongxin obediently bowed his head.
Since he wasn't stupid enough to oppose me here and hurt himself this much warning should do.
Losing interest in him I turned to Jack Ma.
"Everyone else go back to work. Jack Ma let's have a more constructive conversation."
"Alright."
At those words everyone else stood up. But one person his wife Zhang Ying remained seated.
I smiled looking at Zhang Ying who stayed still.
"Planning not to leave Jack Ma alone this time too Mrs. Zhang?"
"I think it would be good for both him and me to listen together. I'll leave if you tell me to."
"No it's fine. You'll find out later anyway so you can stay."
Jack Ma gently squeezed Zhang Ying's hand beside him.
"I apologize again. We had our circumstances."
"Well it's already over. You must have been anxious. I completely understand."
"Thank you for understanding."
Jack Ma let out a relieved sigh. I could see Zhang Ying gently patting his hand.
"The reason I asked Jack Ma to stay is to hear more details about what you're preparing now. As I said earlier the investment will proceed without issue. I want to know more about the future you dream of. Will you tell me Jack Ma?"
I wanted to hear what future this genius Jack Ma dreamed of.
I only knew about Alibaba's success not the detailed aspects.
So I was more curious. What kind of future this small giant dreamed of.
Jack Ma moistened his lips and carefully began speaking.
"As I mentioned earlier our current business model is B2B. But that has clear limitations. Although we've turned profitable it's just been a stepping stone for growth. We need to capture the hearts of countless consumers. Now we need a site that connects directly with consumers."
Jack Ma was right. But there was one problem.
"That's good but such companies already exist right? There's EachNet that eBay just acquired. While everyone's withdrawing because eBay is entering you want to newly enter? Aren't you afraid of eBay?"
Despite my sharp question Jack Ma answered calmly.
"I am afraid. Having lived in America how could I not be afraid of eBay? But if we just avoid things because we're afraid we can't do anything. This is rather an opportunity. When others retreat I want to step forward."
Confidence overflowed from Jack Ma's words and expression.
"Before founding Alibaba I experienced two failures. But now it's different. The future will be ruled by the internet. I've glimpsed that possibility. Right now America is ten no a hundred steps ahead of China. But there's no guarantee that will continue forever. Someday companies like Yahoo eBay and Amazon might fall before us. Now is the time to move forward."
"You might fail this time too? Aren't you afraid?"
Jack Ma gave a bitter smile.
"I am afraid. But we must overcome this fear and move forward."
I'd worried my involvement might have changed Jack Ma but nothing had changed.
No wonder he's called a madman instead of just the Internet Tycoon.
People usually retreat when afraid. But he wanted to advance instead.
I made the right choice with Jack Ma. I pulled up one corner of my mouth in a smile.
"Indeed. This is exactly what I want. Never change. Don't forget your uniqueness Jack Ma. I'm investing in you Jack Ma not Alibaba."
Only then did Jack Ma show a satisfied smile.
Afterwards Jack Ma continued explaining his vision for Alibaba's future.
As I listened to his story I used my knowledge of the future to drop hints one by one.
"How will you handle payments? I understand China has extremely low credit card penetration unlike America or Korea. But accepting cash deposits is too cumbersome for consumers. While it might work for B2B convenience must be the weapon for C2C connecting retailers and consumers directly."
Jack Ma didn't miss a single hint I gave.
After thinking briefly he clapped his hands lightly.
"That's right. Why didn't I think of that? eBay's powerful weapon is PayPal. We should develop our own electronic financial transaction system too. Furthermore we should make Alipay used in all electronic commerce. Eventually Alipay should replace credit cards."
An excited Jack Ma spoke with spittle flying.
I nodded agreeing with his idea.
We continued talking for quite a while after that.
"Mr. Kim when are you thinking of listing on NASDAQ?"
"NASDAQ listing?"
"Yes Chinese companies are starting to list gradually. Some founders are being forced into IPOs because investors want it."
While Alibaba wouldn't need to worry about money and could ignore IPOs other companies would be different.
I put my elbow on the table. Interlocking my fingers I rested my chin on them as I asked.
"Jack Ma what would you prefer?"
"I think making Alibaba bigger and stronger takes priority over NASDAQ listing. As long as Mr. Kim's funding allows I'd like to delay going public as long as possible."
Still resting my chin I looked at Jack Ma with my usual expression.
"Of course we should list if you want to."
Jack Ma hastily added words after flinching at my indifferent gaze but my mouth corners were already raised.
"You want me to keep investing until IPO? As I said earlier I've already secured the maximum possible stake. What more do I get? Tell me why I should invest more."
"But we'll grow that much. Isn't that why you're investing in us Mr. Kim because you believe that?"
I raised an eyebrow at the bold words. I told them not to bow to investors and now he won't bow to me either.
Chuckling I straightened my posture.
"Aren't you tempted? Without an IPO you might miss the chance to become rich right now. Maybe this is the best opportunity."
Jack Ma laughed loudly.
"If it's okay with you Mr. Kim I'm fine with it. Alibaba is more important to me than money."
Now I understood why Alibaba didn't go public until 2014.
"Good. Let's do that. We'll discuss detailed investment terms later. I'll wait whether it's ten or twenty years."
Even investing billions of dollars it was definitely not a losing deal.
Because Alibaba was worth hundreds of billions of dollars.
"Thank you. Having an investor like you Mr. Kim is truly my fortune."
Thank you? I should be thanking you. Instead of answering I gave a gentle smile.
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