Faraday Future seeking $1B amid LeEco financial struggles
【Summary】Just two days after LeEco’s announcement to slash 325 jobs in U.S., Faraday Future (FF) is reportedly seeking $1 billion in funding, speculated by many as a way to protect itself amid main investor LeEco’s financial crisis.
According to Bloomberg, an insider revealed that the EV startup is currently meeting with potential investors and looking for advisors for proceeding to the next level. The company hopes to complete the financing in the next two months.
Last Saturday, Faraday Future's main investor, Chinese billionaire Yueting Jia, stepped down from LeEco's CEO position amid controversy about the company's overly aggressive expansion and management issues. Later LeEco announced that they will cut almost 70% of its workforce in the U.S. office, which was just constructed seven months ago and publicized with a large press conference. The company has abandoned its previous plan to acquire Vizio, and is even thinking about selling the 49-acre office property that it bought from Yahoo for $250 million.
YT Jia earlier has personally invested $300 million in Faraday Future. For FF's current funds-raising plan, the insider confirmed that YT Jia will not be putting up any more capital. Instead, FF will target large scale investors such as sovereign wealth funds.
The mixed progress of Faraday Future
Early in January, Faraday Future debuted its FF91 at 2017 CES Show in Las Vegas, claiming the car to be the world's fastest electric vehicle. The company performed an on-site demonstration competing with Bentley, Ferrari and the Tesla Model S, to show that the FF91 can accelerate from 0 to 60 mph in a whopping 2.39 seconds.
Later, the company claimed that it has so far received 64,000 reservations for FF91. However in February this year, news surfaced that FF is planning to downsize its promised 3-million square feet factory in Nevada, to 650,000 square feet.
Last year, several key executives left the company, including former CEO of Ferrari North America Marco Mattiacci and former Volkswagen's SVP of Product Marketing and Strategy, Joerg Sommer.
As a startup founded in 2014, Faraday Future is headquartered in Gardena, California, with an innovation center in Los Angeles. The company reportedly has 400 employees, and has just passed its three-year anniversary earlier this May. It posted a video of an FF91 on May 9th, hinting the company is still going ahead with the production without being affected. The car is estimated to be priced at $200,000.
However, whether or not the company can be a disruptor in the current Tesla-dominated EV market without being impacted by financial shortage, is yet to be known.
Claire Peng has over 6 years of professional experience in the media industry, covering TV, newspaper and online media. She was once a reporter and producer for Fairchild Television based in Toronto Canada, and worked as an English news reporter for the Global Times in Beijing. She writes mainly about self-driving, companies investment, and the enterprise lab.
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