LeEco is set to secure $1.4 billion (10 billion yuan) in investment. However, the figure is seemingly not enough to quell concerns regarding the company which only recently admitted that they are undergoing financial pressures due to 'over-expansion'. The reason being is that the finer details of the investment have yet to be disclosed. For instance, while the report from Reuters notes that LeEco is confirming the investment, they have yet to confirm who the investment is from – although the current speculation from Chines media outlets is that it is from an insurance company. Furthermore, LeEco has also not provided any details on how the investment will be used by the company. Although, as the report notes, the investment talks are still being finalized – which could be one of the reasons for the scarcity of information coming through on the investment. Therefore, once the details become final, more information on the finer aspects of this investment, including how the funds will be used, will presumably come to light.
One of the reasons as to why the market seems to be uncertain in spite of the new investment, is the way in which LeEco has risen and subsequently made its cash-sensitive declaration ahead of 2017. In a short space of time, LeEco has made a point of branching out into new industries, and very quickly. In fact, it was only in October (almost immediately before the first real indicator of the LeEco cash woes became public knowledge) when LeEco held their first proper US launch event. Signalling their entrance to the US market.
As such, with a fairly diverging portfolio, grand expansion plans, and the news that LeEco is now struggling in some respects, financially, it does seem that even with a reported $1.4 billion in investment incoming, there are concerns as to whether that will be enough to leverage the company's ambitions. Especially as at the same time, the company seems to be downsizing and looking at ways in which it can now save, while also continuing to expand. A balancing act which is a very thin line to walk. The latest of which, is the significant reduction of LeEco’s presence in India – which also happens to be one of the fastest growing markets.