Tencent Injects Funds into Leyaoyao – Another Offline Venture for WeChat Pay
Facing the slowing increase of online users, the biggest players are eyeing new engines for generating traffic. Offline equipment, including arcades and massage chairs, is Tencent’s next segment to conquer.
In the ‘Payment Industry Innovation Contest’ held by WeChat Pay in early 2019, Leyaoyao, a Shenzhen-based unmanned equipment service provider, won the ‘Excellent Case Award for Unmanned Equipment.’ After the contest, the prize winner gained a larger affirmation from Tencent a year later.
On February 18, 2019, Leyaoyao completed the Series C funding round with around CNY 150 million. Tencent led in this round with participation from Bright Venture Capital, GF Xinde Investment and others, pushing the company’s valuation to CNY 1.5 billion after this investment.
Founded in October 2015, the company received six rounds of financing within four years.
It provides intelligent solutions for self-service equipment, including mobile payment services with smart hardware and SaaS systems. Leyaoyao also provides an open IoT platform for the Internet of Things, in order to help operators of automatic machines improve their operational and management efficiency. The company’s products include smart payment boxes, smart IoT chips and face scan payment kits; the tech could be applied to different machines, such as arcades, shared massage chairs, shared washing machines, vending machines and so on.
The emergence of mobile payment has solved many problems for offline equipment, such as the troublesome coin-activated operations, the high labor cost and bad user experience. On the other hand, the appearance of offline equipment and service providers like Leyaoyao has become a potential traffic source for giant players like Tencent and Alibaba.
“Leyaoyao made its debut through mobile payment to implement digitalization and IoT transformation for offline equipment, which will become the entrance of hundreds of billions of users in the future,” said Lu Hongyu, co-founder of DT Capital Partners.
According to Leyaoyao, the company has accumulated access to 600,000 offline entertainment devices, spreading across more than 600 cities across China. So far, it occupies 75% of the market share in entertainment devices and is focusing on lifestyle, retail and other self-service equipment categories.
Besides, it has reached in-depth cooperation with over 3,000 manufacturing factories, serving more than 100,000 business operators and providing mobile payment services to more than 145 million users. At present, the peak number of single-day payments exceeds CNY 3 million and the monthly mobile payment flow is over CNY 600 million.