At the end of last year, Shenzhen-based rollable display developer Royole, which once had a valuation of more than 50 billion yuan ($7.8 billion), was reported to have a shortage of funds and faced arrears in its employees’ salaries. According to a report by domestic media outlet Hongxingzibenju on Friday, the unicorn firm is still in deep trouble from a lack of funds.
According to the report, a Royole employee said Tuesday that since September last year, he has received five emails regarding unpaid wages, and the content of the emails is roughly the same: “The financing of the company is advancing, the funds will arrive soon, and the wages will be reissued immediately.” According to his own calculation, Royole has owed him nearly 100,000 yuan in salary. The employee also said that the number of employees working for the company has dropped from 1,800 to 700.
Before February 2021, Royole was highly sought after by investors. From August 2017 to November 2019 alone, it received seven rounds of financing, and the firm had established ties with many well-known investment institutions such as CITIC Capital, Shenzhen Capital Group, Hangzhou Cornerstone and Poly (Hengqin) Capital.
Today, however, Royole finds itself deeply mired in the whirlpool of wage arrears, and has been seeking fresh financing. Since it withdrew a listing application on Feburary 10, 2021, no new investment has been achieved by the company.
In May 2012, Bill Liu returned from the United States to start a business, and, together with his other two Tsinghua University and Stanford alumni Wei Peng and Fan Junchao, jointly invested 100,000 yuan to establish Royole. In August 2014, the company released the thinnest color flexible display in the world, with a width of only 0.01 mm and a curl radius of 1 mm.
In 2020, Royole shelved its IPO intentions in the United States and turned to an A-share plan at the Shanghai Sci-Tech Innovation Board (STAR Market). It planned to raise 14.4 billion yuan, of which 7.2 billion yuan would be used to supplement working capital.
However, according to its prospectus, Royole has been in a state of financial losses from 2017 to 2019, and from January to June of 2020. Within the above period, the net profit attributable to shareholders of the parent company was -359 million yuan in 2017, -802 million yuan in 2018, -1.073 billion yuan in 2019 and -961 million yuan in the first half of 2021. In other words, the company has only achieved a total revenue of 517 million yuan in the past three and a half years, but its loss is as high as 3.2 billion yuan, and the loss continues to expand.