ST is planning to acquire SaaS service provider HLL, with hopes of resolving its operation

Technology Author: Xin Zeng, Yiran Xing Aug 09, 2023 02:46 PM (GMT+8)

BoCOInter-telecom(Chinese:ST信通), a listed company on the A-share market, announced an external investment framework agreement,on August 8, 2023. They plan to acquire a 7.692% stake in the parent company of the restaurant SaaS service provider HLL(Chinese:哗啦啦), Beijing Duolaidian Information Technology Co., Ltd., for 250 million yuan. Within three working days of the agreement taking effect, ST Xintong will pay an earnest deposit of 20 million yuan to HLL. For HLL, this investment from ST Xintong is like a "timely help." It is worth noting that the investment amount of 250 million yuan is close to ST Xintong's revenue of 261 million yuan for the full year of 2022.

Beijing Duolaidian Information Technology Co., Ltd. (referred to as "Duolaidian Information Technology"(Chinese:多来点信息技术)) was established in 2009 with a registered capital of CNY 210 million(USD 32.7 million). Its subsidiary is HLL. Since 2013, HLL has received investments from several well-known institutions, including Hillhouse Capital, Meituan's Strategic Investment Department, Dianping, Shenzhen Capital Group, Huasheng Yihong, and Chuangdongfang Investment.

At the end of 2022, HLL suddenly faced difficulties in cash flow, and merchants were unable to withdraw their store revenue from the settlement payment system, causing panic among many small and medium-sized businesses. At that time, HLL issued a statement calming the situation, stating that the company's operations were affected by the epidemic, combined with data migration and system upgrades, leading to a significant increase in workload and promising to gradually resolve the issues and provide compensation within a few months.

According to the "SAAS Industry Trend Insight" report, as digitalization continues to advance and is influenced by the pandemic, the global cloud computing market is undergoing rapid and systemic changes. In 2021, during the gradual recovery in the post-pandemic era, the global digital transformation reached a new peak, with the cloud computing market reaching a scale of USD 544.9 billion, with a growth rate of 24.6%. By the end of 2022, the global cloud computing market reached USD 669.2 billion, and it is expected to exceed USD 800 billion US by 2023. Currently, the global cloud computing market is still dominated by public clouds, accounting for about 70% of the market share, while private clouds and hybrid clouds occupy a smaller market share.

Some of the top domestic restaurant enterprise SaaS providers include Heavenly Wealth Business Dragon(Chinese:天财商龙), while some of the foreign ones include Toast, Lightspeed, and Revel Systems.

According to Tianyancha, Duolaidian Information Technology is involved in 204 judicial disputes, with the company being sued in over 97% of the cases. Among them, there were 186 cases in 2023, mainly related to service contract disputes, labor disputes, and contract disputes, involving issues such as merchant withdrawals and unpaid wages. For a growing internet company, a broken capital chain can be the "last straw that breaks the camel's back." If this round of financing can be successfully completed, HLL may still have a chance to survive.