Recently, Kingnet Network released a statement indicating that Kingnet Network's subsidiary, Shengyou Network, intends to transfer 25% shares of Hangzhou FlowEntertainment, the developer behind "Figure Story",
According to the statement, FlowEntertainment decided to add 612,25k RMB (~95,620 USD) of registered capital, which accounts for 20% of the total share capital of FlowEntertainment after the capital increase. Hangzhou BoBo (NetEase affiliated company), Sequoia Capital, Youban Venture, and Huandian Technology (Bilibili) will be the new investors. The four investors plan to transfer the subscribed registered capital of FlowEntertainment held by Shengyou Network for a total of 54 million RMB (~8.4 million USD) as the share transfer consideration and subscribe to the newly registered capital of FlowEntertainment for a total of 60 million RMB (~9.3 million USD) as the consideration for the 612.25k RMB increased registered capital.
After the transaction, Shengyou Network's equity of FlowEntertainment downsized from 34.67% to 7.73%. The founder of FlowEntertainment, Liu Mei, and the creator of "Figure Story", Chen Yu, holds 31.73% shares of FlowEntertainment through two companies. Hangzhou BoBo holds 20% equity of FlowEntertainment to become the second-largest shareholder of the company. Sequoia Capital holds 10% shares. Bilibili and Youban each hold 5% shares.
It is worth to mention Youban Venture's top three shareholders are Hangzhou Bobo, HyperGryph, and Yostar. The two famous Shanghai-based developers show clear interests in the potential of FlowEntertainment.
FlowEntertainment owns game titles that include Anime game Figure Story, parkour game Dash Crashers, FPS game Dark Hunter, etc. Figure Story is the most successful one among the titles, achieving a great result in the South Korean market. According to Sensor Tower, Figure Story is predicted to achieve 4 million USD within October in the Google Play store.
But for FlowEntertainment, its operation is not as optimistic. Its net loss for the year 2020 was 17,669,800 RMB. For the first three quarters of 2021, the company achieved a net profit of 827,408.8 CNY (129,266.47 USD), barely reversing the loss. However, the net cash flow from operating activities has been negative for two consecutive years, and the company's total liabilities are significantly higher than its total assets, showing insolvency.
