May 26, 2017 / 10:33 AM / 2 years ago

China LeEco's sports unit says valued at $3.5 billion after new funding round

LeEco's new Le Pro3 phone is on display during a press event in San Francisco, California, U.S. October 19, 2016. RETUERS/Beck Diefenbach

BEIJING/SHANGHAI (Reuters) - Chinese tech conglomerate LeEco’s sports unit said it completed a new round of funding that valued it at 24 billion yuan ($3.50 billion) and that its investors will form a new committee to supervise its finances.

LeEco is currently tackling a cash crunch, caused by its aggressive expansion, by restructuring its operations and cutting jobs.

The unit, LeSports, a sports content platform, did not disclose the amount of funding in the latest round.

The group had said in April last year that LeSports raised $1.2 billion in a funding round led by HNA Capital, part of China’s HNA Group.

Investors, including HNA Capital, will form a new steering committee for strategic decisions, daily oversight and financial supervision, according to a statement on LeSports’ website.

LeEco stretched from video streaming to TV sets, smartphones, sports and even electric vehicles in a little over a decade, although this rapid expansion spurred a cash shortfall last year that left the company scrambling for new funds.

Shareholder representative Chen Chen said there existed a “chronic illness” typical of new economy internet firms under the previous LeSports administrative structure but the committee will ensure the company grows at a stable but rapid pace and avoids risk, according to the statement.

LeSports would continue to acquire the rights to new content but would take a more balanced approach, the statement said.

Reporting by Jake Spring and Adam Jourdan; Editing by Muralikumar Anantharaman

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