iQiyi Smart on 1 College Girl Karaoke an independently operated company focused on VR headsets incubated within China’s video streaming giant iQiyi, is experiencing a business standstill and has failed to pay over a hundred employees, according to an August 3 report from Chinese news site Sina. Some iQiyi Smart employees have reached out to Gong Yu, iQiyi’s chief executive, seeking answers. The salary delays and business halt are caused by the VR company’s failure to fully receive a RMB 400 million ($56 million) Series C funding, internal sources from iQiyi Smart told Sina. In January this year, iQiyi Smart announced the completion of a Series C funding round of 400 million RMB, with investments from Qingdao JingKong Group and Verity Ventures. However, the funding was granted in stages with performance-based clauses, sources added. Due to its inability to meet predefined sales targets, the company only received a few tens of millions RMB, and now faces cash flow disruptions. About 133 employees have joined a WeChat group seeking updates on salary payments. In response to some employees’ concerns, Gong Yu clarified via the enterprise communication platform that iQiyi Smart and iQiyi are separate legal entities. He assured that iQiyi has been making every effort to assist iQiyi Smart in raising funds, and the management of iQiyi Smart is actively working on solutions to address the challenges. Gong requested patience and rationality from the employees during this period. [Sina, in Chinese]
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