Influencer Li Ziqi Sues Weinian, ByteDance Withdraws Stake in Firm
Several Chinese media outlets reported on Wednesday that due to a dispute between prominent web influencer Li Ziqi and her partner company, Weinian Brand Management Co., Ltd., ByteDance withdrew its stake in the company on October 16. ByteDance has confirmed the report.
About four months ago, ByteDance took up a 1.48% stake in Weinian. Chinese media outlet 36Kr quoted a person close to the transaction as saying that ByteDance had invested Weinian mainly due to its optimistic attitude about Li Ziqi. Since Li and Weinian were at odds, ByteDance decided to withdraw from Weinian according to the investment agreement.
Weinian was established in 2013, and its business scope includes brand management, internet sales, broker services and more. Up to now, seven rounds of financing have been completed, with Meridian Capital, Mango Wenchuang Fund and Sina Weibo all serving as investors.
The cooperation between Li Ziqi and Weinian began in July 2017. Both parties jointly invested 1 million yuan ($156,289) to establish Sichuan Ziqi Culture Communication Co., Ltd., with Li Ziqi holding 49% of the shares and serving as the executive director and legal representative of the company. Weinian holds 51% of the shares, and its founder Liu Tongming serves as the supervisor of Ziqi Culture.
In recent years, thanks to the popularity of Li Ziqi, Weinian has rapidly expanded its business territory. Domestic enterprise data platform Tianyancha shows that among the 10 companies invested by Weinian at present, except Ziqi Culture, the other companies were established after 2018, and these companies are involved in food sales, cultural communication, agricultural scientific research and other fields.
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It is worth mentioning that Guangxi Xingliu Food Co., Ltd., which is mainly in charge of the operation of snail rice noodles with the Li Ziqi’s brand, was established in July 2020, and 70% of its stakes were owned by Weinian. According to previous media data, the annual sales of products with Li Ziqi’s brand in 2020 was about 1.6 billion yuan ($250 million), about 30% of which was contributed by snail rice noodles.
However, because Li Ziqi does not hold any shares in Weinian, the huge profits obtained by Weinian are also considered to have nothing to do with Li Ziqi herself, which is an important factor in the dispute between the two sides.