Deals | Tencent Invests in L Square Studio Tens of Millions of Yuan B Round Financing

L Square Studio once received angel wheel investment from Sinovation Ventures

L2 Studio (艾尔平方), an original animation production company, announced that it has completed a tens of millions of yuan B round financing by Tencent.

L2 Studio was founded in 2013, directed by LU Hengyu and LI Shujie. It mainly engages in IP animation, the creation and production of animation film, and the development of engine animation. Its work includes: One Hundred Thousand Bad Jokes, a phenomenal and explosively popular animated cartoon broadcasted in 2012, and Rakshasa Street in 2016, with nearly 600 million views on the platforms Youku and BILIBILI.

Image credit to L Square Studio.

According to iResearch data, the number of Chinese comic users are increasing exponentially with every year, from 22.57 million in 2013 to 97.25 million in 2017. The output value of China’s animation industry in 2017 set a new high of 150 billion yuan (approximately US$23.8 billion). With the expansion of the animation crowd and the improvement in payment ability, the animation industry

L2 Studio produces original animation with “story as the core”, which is also the way it differentiates itself from other animated film and television production teams’ way of “animating cartoons”. The team can adjust content according to the different media form and audience.

LU Hengyu thinks that the creative team having a “business sense” is very important. During the development process, the focus translates to audience and market orientation. From the audience’s appeal and consumption power, it can be pushed back to product form, creative point, and so on.

After several years of development, the business scope of L2 Studio extended from animation production to form a complete business chain, such as project development, data research, production, distribution, marketing, business, and other business chains. Profit streams have also become more diverse, including animation movie ownership, advertising customization, copyright licensing, adaptation licensing, content payment, and derivatives sales.

Team-wise, L2 Studio has more than 130 people forming production teams of both two-dimensional animation and three-dimensional animation, and new technology research teams such as VR, engine animation, motion capture, and so on. L2 Studio hopes to use these new technologies to make the animation production process more simple and interesting, and at the same time improving the production efficiency to a greater extent.

L2 Studio has 3 existing product lines. The output of two-dimensional animations is more than 240 minutes per year, while the three-dimensional animations is more than 100 minutes per year, and the engine animations is more than 200 minutes per year.

Before the current round of financing, L2 Studio once received an A round financing from Phoenix Tree Capital and an angel round financing from Sinovation Ventures.