Five days later, Penguin, Ah Li, Huake, and Kuai Pao signed a letter of intent in Hu City.
The letter covered core business terms such as the investment amount, valuation, equity stake, and closing conditions. It also included an exclusivity clause, requiring Kuai Pao not to discuss financing with any other investment firms for the next three months.
Until the due diligence was completed and a formal agreement was signed, the sole investors for Kuai Pao's Series B financing would be Penguin, Ah Li, and Huake.
Kuai Pao's total GMV for 2012 was 31.7 billion, primarily from its food delivery service. Based on the industry's average price-to-sales ratio, combined with Kuai Pao's 90% market share, the efforts of Gao Weilin and Pei Yi ultimately secured a 1.2x coefficient. With this, the valuation was set at 5.8 billion US Dollars.
Compared to the 1.2 billion valuation from its Series A financing a year ago, this represented an increase of 383.3%.
