The phrase "half a step ahead is a pioneer, and one step ahead is a martyr" seems to be confirmed again in the story of Royole Technology. At a time when folding screen mobile phones are gradually becoming a trend, Rouyu, who once claimed to "bend the world", is dying.
When domestic mobile phones have launched the first folding screen mobile phone, the founder of the world's first foldable flexible screen mobile phone, Royole Technology, has broken the capital chain and owed wages for up to half a year. Recently, for two consecutive days, Liu Shuwei, director and researcher of the China Enterprise Research Center of the Central University of Finance and Economics, spoke out for "saving Royole" on his Personal WeChat public account. In the article, Liu Shuwei suggested that the government actively help Royole out of the predicament, but many people also expressed respect for the choice of the market. Who will save Royole? Who should save Royole?
Liu Shuwei issued a second article calling for the rescue of Royole
On April 13, Liu Shuwei published an article on his Personal WeChat Public Account "Saving Royole". Liu Shuwei is the director and researcher of the China Enterprise Research Center of the Central University of Finance and Economics, and she also has another identity - an independent director of Shenzhen Royole Technology Co., Ltd.
In the article "Save Royole", Liu Shuwei counted the research and development achievements of Royole Technology and said that Royole Technology's leading ULT-NSSP technology route can enable the mainland to have completely independent intellectual property rights in the full flexible display industry and get rid of the situation of relying on foreign leading technology routes.
From the article, we can learn about royole's funding since its inception. In the nearly ten years from its establishment in May 2012 to September 2021, the company conducted a total of 8 rounds of financing, obtaining equity investment of about 6.197 billion yuan, debt financing of about 3.653 billion yuan, and cash inflow from the company's operating activities of 1.717 billion yuan. The total cash inflow was 11.628 billion yuan.
"Lack of experience in how to open up the market, create sufficient operating cash flow, and ensure the company's continued operation." This is the reason why Liu Shuwei analyzed Royole's predicament in the text. At the same time, at the end of the article, Liu Shuwei suggested that governments at all levels actively help Royole Technology to solve the shortage of funds and help Royole Technology introduce strategic investors in order to open up the application market of flexible technology in the mainland.
The next day, in the article "Cherishing the R&D Achievements from 0 to 1" released on April 14, Liu Shuwei said that Royole Technology has a strong basic R&D capability from 0 to 1. But from 1 to N research and development, Royole Technology must cooperate with customers in research and development. Royole Technology is not good at finding customers, which is the weakness of Royole Technology.
So, how to solve the dilemma of Royole Technology? Liu Shuwei said in the article that if companies related to flexible technology become strategic investors of Royole Technology, then the strategic investment company can give priority to obtaining the basic research and development results of Royole Technology, and on this basis, the two sides will use the basic research results to develop innovative products. In this way, on the one hand, give full play to the R&D capabilities of Royole Technology and enhance the market competitiveness of strategic investment companies; on the other hand, to avoid the weakness of Royole Technology, Royole Technology can concentrate on R&D work.
Liu Shuwei's two posts, earnest words, also put forward a lot of suggestions and ideas for "saving Royole". At the same time, it has also aroused everyone's attention and hot discussion, and has once again brought Royole Technology back to the public eye.
The favored "unicorns" of the past were abandoned by capital
Today's Royole Technology financing is blocked, the capital chain is broken, but once it was also the darling of capital, including CITIC Capital, IDG, Shenzhen Venture Capital and many other well-known venture capital have participated in financing.
Since the establishment of Royole Technology, it has been "halo plus body". Its founder, Liu Zihong, known as a "genius teenager", was admitted to Tsinghua University at the age of 17 with the results of the Fuzhou Science College Entrance Examination in Jiangxi Province. After graduating with a master's degree in electrical engineering from Tsinghua University, Liu Zihong received his Ph.D. in electrical engineering from Stanford University.
In 2012, 29-year-old Liu Zihong returned from the United States to start a business, and together with two other Tsinghua University and Stanford alumni Wei Peng and Fan Junchao, he jointly invested 100,000 yuan to found Royole Technology. In August 2014, Royole Technology released the world's thinnest color flexible display, with a thickness of only 0.01 mm and a curl radius of up to 1 mm, which was a subversive technical level at that time.
It is precisely because of the subversive technical level that Royole Technology is highly sought after by capital. From August 2017 to November 2019 alone, Royole Technology has received 7 rounds of financing, including citic capital, Shenzhen Venture Capital, Hangzhou Cornerstone, Poly (Hengqin) Capital and many other well-known investment institutions. In 2020, Royole Technology also ranked among the top 12 in the "2020 China New Economy Unicorn 200 List" with a valuation of US$6 billion, and became the top of the "China Entrepreneur" 2020 "China Science and Technology Innovation Enterprise Top 100 List".
Also in 2020, Royole Technology shelved its plans to go to the United States for an IPO, and rushed to the A-share science and technology innovation board on the last day, planning to raise 14.4 billion yuan, of which 7.2 billion yuan was used to supplement working capital. However, according to the prospectus, from 2017 to 2019, Royole Technology's revenue was 0.65 billion yuan, 109 million yuan and 227 million yuan, and the net loss was 359 million yuan, 802 million yuan and 1.073 billion yuan, respectively. In the first half of 2020, Royole Technology's revenue was 116 million yuan and its net loss was 960 million yuan.
That is to say, from 2017 to the first half of 2020, in three and a half years, Royole Technology achieved a total revenue of 517 million yuan and a loss of up to 3.195 billion yuan. While continuously financing, Royole Technology has always been difficult to achieve profitability.
In the end, Royole Technology's A-share journey also ended in February 2021, and the company withdrew its listing application. Royole, which did not succeed in listing, began to tighten its capital chain. Subsequently, Royole Technology was also revealed to have been in arrears for about half a year, and the number of employees has dropped from 1800 to 700.
Government or market? Who will save Royole
In the face of this dilemma, Liu Shuwei, who has been the independent director of Royole Technology since 2020, said that he hopes that the government will help Royole Technology solve the shortage of funds and help Royole Technology introduce strategic investors in order to open up the application market of flexible technology in the mainland.
However, there are more problems to be solved behind the shortage of funds, the most fatal of which is that Royole's "hematopoietic ability" has been questioned. Since its inception 9 years ago, Royole's screen has not appeared in the products of any mainstream mobile phone manufacturers, and its own brands are difficult to find in public channels. Its technical ingenuity, mass production ability and customer acquisition ability are also beginning to be questioned.
Senior IT Internet analyst Major General Ding analyzed that the first choice of Royole is a highly technology and capital-intensive industrial track, with a long return cycle and a large amount of funds needed in the early stage. However, from the feedback at the market level, the flexible electronic solution of the B-end has not yet been applied to any mainstream mobile phone manufacturers. Its C-end consumer products, sales performance has also been flat. Whether it is the B-end or the C-end, Royole lacks customers and sales. Burning money without forming a scale of market returns eventually leads to a difficult situation.
For how to solve the problem, Major General Ding also gave his own views. "First of all, we must let the ultra-low temperature non-silicon process integration technology developed by it be recognized by everyone and form an industrial consensus, so that it is possible to be favored by the market."
It is understood that there are two main technical routes for flexible screens, one is the polysilicon (LTPS) technology mainly expanded by companies such as BOE, TCL Technology, Samsung, etc., and the main folding screen mobile phones and other products on the market are almost all supplied by these companies; the other is the ultra-low temperature non-silicon process integration technology (ULT-NSSP) independently developed by Royole.
"At present, BOE and TCL technology have done a good job, and with the mature optimization of the industrial line, its price is also declining." From a market point of view, it is unlikely that manufacturers will abandon mature polysilicon technology and choose the ultra-low temperature non-silicon process integration technology independently developed by Royole. Major General Ding analyzed, "At this time, asking the government for help is also a more feasible choice." ”
Image source: Liu Shuwei public number
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