On November 18, 2024, Royole Technology was officially declared bankrupt by the court. The 'ancestor' of foldable smartphones has officially bowed out!
The founder ran abroad with his secretary just as the company was on the verge of bankruptcy, leaving behind over a hundred million losses for 300 employees and a 'mess'.
A tech company once valued at 50 billion, founder Liu Zihong once claimed he would 'bend the world'. However, the company ultimately faced wage arrears, production stoppages, layoffs, and bankruptcy. It is truly infuriating.
As a 'unicorn' tech enterprise, Royole Technology was co-founded in 2012 by Liu Zihong, a 'genius boy' who graduated from Tsinghua University, along with his two Tsinghua alumni Wei Peng and Fan Junchao, with a total investment of 100,000 yuan. That year, Liu Zihong was 29 years old.
Liu Zihong was born in 1983 and won national championships in both physics and chemistry at just 17 years old. That same year, he was admitted to Tsinghua University. In 2003, he won an individual special award and the national championship in the national 'Challenge Cup' college student science and technology works competition. After graduating, he was exempted from exams to pursue a master's degree in the Department of Electronic Engineering at Tsinghua University.
After graduating with a master's degree in 2006, he declined admission to a PhD program at the University of Cambridge in the UK and went to Stanford University in the US to pursue a doctorate. After graduating in 2009, he joined IBM's global research center in New York to start semiconductor research.
Three years later, he and two classmates established Shenzhen Royole Technology Co., Ltd., engaging in the manufacturing of computers, communications, and other electronic devices. Offices have been set up in Shenzhen, Beijing, Hong Kong, Silicon Valley in the United States, and Tokyo in Japan.
Shortly after the company's establishment, it received investments from investment institutions and support from Shenzhen's 'Peacock Plan'. After securing the investment, Liu Zihong immediately immersed himself in day and night research.
Hard work pays off; in 2014, Royole Technology launched the world's thinnest color flexible display, enabling them to successfully complete nearly 1.1 billion yuan in Series C financing in March 2015.
In 2018, Royole Technology built the world's first large-scale production line for fully flexible displays and released the world's first foldable smartphone priced at 10,000 yuan, FlexPai.
This product completely made Royole Technology famous in the global tech circle. It soared to become a tech giant valued at over several billion dollars. The company's future can be said to be bright.
As an emerging force in the tech field, Royole Technology has become one of the fastest-growing unicorn tech startups globally, naturally attracting capital's favor. Since its establishment in 2012, Royole Technology has gone through 9 rounds of equity financing totaling 6.197 billion and 3.653 billion in debt financing.
The frenzied influx of capital, including financial institutions like IDG, Shenzhen Capital Group, and CITIC Capital 'rushing to send money', made Royole Technology's market value soar. By 2020, Royole Technology's valuation had skyrocketed to 6 billion US dollars, equivalent to about 50 billion yuan.
As an emerging tech company, it was about time for the company to go public. But for some unknown reason, in 2021, Royole Technology suddenly withdrew its IPO application and ultimately missed out on the capital market.
The failure to go public triggered a chain reaction at Royole Technology. The company began to delay wages and stop paying social security, even retreating from its headquarters building in Shenzhen. After these incidents, many began to doubt whether Royole's funding chain had problems.
In fact, as early as 2020, Royole Technology was already facing funding shortages. Over the past three years, it has accumulated a loss of 3.2 billion. The speed of R&D spending is three times that of revenue, which has long left this tech newcomer heavily in debt.
The launched foldable smartphone FlexPai not only has a high price tag of 8,999 yuan but is also out of stock. To buy it, one must pre-order, and it takes at least 2-3 months to receive the phone. This has also sharply reduced FlexPai's sales.
At the same time, products like the smart notebook and head-mounted cinema not only consume a large amount of R&D funds but cannot be monetized in the short term, further challenging Royole Technology's funding chain.
The root cause of all this actually stems from Liu Zihong's stubbornness. According to company employees' recollections: as early as 2020, Royole Technology had already closed a large number of production lines, and its funding chain had actually long been severed.
By 2021, Royole Technology began to experience situations of wage arrears and social security payment interruptions, with some wages being overdue for as long as 17 months.
Trying to achieve in three years what others need to invest hundreds of billions and take ten years to accomplish. Liu Zihong has paid the price for his arrogance.
Originally relying on production lines to sell curved screens could also make a profit. However, the stubborn Liu Zihong refused to supply screens to mobile phone manufacturers after developing ultra-thin curved screens, insisting on independent research and production.
His actions completely exceeded his capabilities, and the capital also misjudged his abilities. In just one year, the company has headed toward decline. The company can only rely on the remaining 800 million in its account to barely survive. Liu Zihong has also paid the price for his absurd 'product logic'.
After the debt crisis broke out, employees faced a long road to seek back pay. However, Liu Zihong insisted to the employees demanding wages: 'They came for high salaries, but now they want to destroy Shenzhen's entrepreneurial image.' This statement is simply absurd.
As of June 2024, Royole Technology has 32 pieces of information about being executed, with a total amount executed reaching 2.9 billion.
On April 23, 2024, the Shenzhen Intermediate People's Court held a hearing on the bankruptcy review of Royole Technology, and Liu Zihong also participated in the hearing.
But soon an unexpected event occurred; when everyone saw him again, he was already sitting in the audience of the US Open Tennis Championships with his female secretary.
Yes, you guessed it right! Liu Zihong 'ran away'. He took his beautiful female secretary and fled to the United States, the 'holy land' for Chinese business tycoons fleeing.
On November 18, 2024, Royole Technology was officially declared bankrupt. Since its establishment, Royole Technology has always been 'shrouded in a halo'. This has led everyone to misjudge this tech company.
Liu Zihong may have gone off with his female secretary, but how can the losses of over a hundred million for 300 employees be recovered?
This inevitably reminds us of Lin Qiang, the founder of 'Hehe System', who, after amassing wealth through a 'Ponzi scheme', also ran abroad to enjoy life as a 'young genius'.
Coincidentally, the same year Liu Zihong 'ran away', Lin Qiang was arrested in Indonesia and sent back to the country, facing legal sanctions.
Although Liu Zihong 'ran away', it is believed that in the near future he will certainly be pursued and sent back to the country like Lin Qiang and face the punishment he deserves.
Currently, Guangdong Huashang Law Firm has been appointed as the fund manager for Royole Technology, handling some patent transfers and debt restructuring work for Royole Technology. It is believed that in the near future, there will definitely be an explanation for the losses of over 100 million for 300 employees!
Reference Materials:
2024-11-19 19:33 · Securities Times Breaking News! Royole Technology has been declared bankrupt by the Shenzhen Intermediate Court!
2024-06-10 15:36 · New Evening News Formerly valued at 50 billion, the 'unicorn' faces bankruptcy liquidation, and the founder is a Tsinghua master's Stanford PhD.
2024-08-31 22:42 · Securities Times Breaking News! Royole Technology Chairman Liu Zihong has resigned and recently appeared in the US to watch tennis.
2023-12-05. Media Reports. Royole Technology.
2023-12-26. People's Daily. Foldable smartphones enter the era of being priced under 10,000 yuan.
2023-12-26. Sina. Royole Technology has owed wages for up to a year, and dozens of employees have gone on strike on site to demand wages.
