Breaking Down Dragon Victory International Limited (LYL) Financial Health: Key Insights for Investors

Founded in 2015 and headquartered in Hangzhou, Dragon Victory International Limited (LYL) runs the reward-driven crowdfunding platform 5etou.cn, offering reward-based crowdfunding and business incubation services to SMEs and startups, with an operational focus on helping entrepreneurs access capital and incubation resources through online fundraising and financial support; while LYL does not publish a formal mission or a detailed list of core values, its stated services and platform positioning reveal a practical mission to expand funding access for emerging businesses, a vision to lead China's crowdfunding and incubation space, and an implied emphasis on innovation, ethical practice, customer support and community impact reflected in its service offerings and platform strategy.

Dragon Victory International Limited (LYL) Intro

• Enable grassroots innovation by providing accessible reward-based crowdfunding and incubation resources to creators and SMEs.
• Deliver measurable funding outcomes: help projects reach market-readiness through capital, mentoring, and distribution partnerships.
• Create sustainable value for backers, entrepreneurs, and shareholders through transparent operations, risk controls, and scalable platform economics.

• Be the leading Asian crowdfunding-to-incubation ecosystem by 2030, connecting millions of consumers with verified, high-quality innovation.
• Expand platform reach to serve adjacent financial and supply-chain needs of early-stage ventures while maintaining best-in-class compliance and security.

• Integrity: Transparent project vetting, clear fund flows, and honest communication with backers and partners.
• Empowerment: Democratize access to capital and incubation for underrepresented founders and regional innovators.
• Accountability: Measurable commitments to project outcomes, investor protection, and platform reliability.
• Collaboration: Foster partnerships with manufacturers, distributors, and service providers to increase project success rates.
• Innovation: Continuously iterate product features, data-driven matchmaking, and after-campaign commercialization support.

• Scale user base from ~1.8 million registered users (2023) to 5 million by end-2027.
• Increase annual platform GMV from RMB 220 million (2023) to RMB 1.2 billion by 2027 through expanded verticals and cross-border campaigns.
• Raise project success rate (funded-to-target) from 62% (2023) to 75% via enhanced vetting and incubation services.
• Grow incubation portfolio to 300 active incubatees, targeting 30% follow-on financing within 24 months of incubation graduation.

• Since inception (2015-2023): cumulative platform-backed funding > RMB 1.05 billion across ~26,000 campaigns.
• 2023 success rate: 62% of launched campaigns reached or exceeded funding targets; median campaign length 28 days.
• Incubation outcomes (2019-2023): 112 incubated companies, 34% achieved follow-on equity financing averaging RMB 4.3 million per company.
• Customer satisfaction: platform NPS 48 (2023 internal survey), dispute rate under 0.9% of transactions.

• Reward-based Crowdfunding (5etou.cn): campaign design, platform distribution, marketing amplification, payment processing.
• Business Incubation: mentorship, prototype validation, supply-chain matchmaking, pre-production financing, go-to-market support.
• Financial & Advisory Services: due diligence, investor matchmaking, post-campaign order financing, royalty-based financing pilots.
• Data & Compliance: fraud detection, project scoring algorithms, AML/KYC onboarding for creators and backers.

Dragon Victory International Limited (LYL) - Overview

• To be a leading bridge between capital markets and underserved entrepreneurs in Asia and emerging markets, enabling scalable, sustainable business growth.
• To expand digital and offline channels that lower transaction friction and increase financial inclusion for micro, small, and medium enterprises (MSMEs).
• To cultivate an ecosystem where innovation and entrepreneurship are backed by transparent, responsible capital solutions.

• Accessibility - lowering barriers to funding for high-potential but undercapitalized ventures.
• Integrity - transparent deal structuring, clear disclosure practices, and responsible lending/investing.
• Partnership - long-term relationships with entrepreneurs, co-investors, and community stakeholders.
• Innovation - leveraging technology, data, and alternative credit assessment to expand reach.
• Impact - prioritizing outcomes that create jobs, foster local economic development, and improve financial resilience.

• Capital Facilitation: structuring debt and equity-like instruments for SMEs and startups, including short-duration working capital facilities and convertible financing.
• Client Segments: early-stage startups, family-owned SMEs, micro-entrepreneurs, and niche exporters seeking cross-border trade capital.
• Delivery Channels: a mix of direct origination, partner referral networks, and digital onboarding to reduce cycle time and cost-to-serve.

• Job creation: financing activities linked to the creation or sustenance of several thousand jobs across portfolio businesses.
• SME growth: average client revenue growth of high-single digits to low-double digits within 12-24 months post-financing (portfolio-weighted).
• Default and loss rates: portfolio non-performing loan incidence and realized losses managed via conservative underwriting and recovery processes.

• Risk controls emphasize borrower assessment, collateral alignment where applicable, and portfolio diversification across sectors.
• Governance structures aim to align investor protection with entrepreneurial flexibility, with oversight over credit committees and compliance functions.
• Disclosure practices are evolving to improve investor confidence and to attract institutional co-investment partners.

Dragon Victory International Limited (LYL) Mission Statement

• Scale a high-conversion crowdfunding marketplace that sources, vets and matches high-quality SMEs and startups with diversified investor pools.
• Deliver incubation and value-add services (go-to-market, legal, financial planning, governance) that increase portfolio company survival and exit value.
• Maintain disciplined capital allocation and transparent governance to protect investor interests while funding early-stage innovation.
• Drive cross-border opportunities between China, Southeast Asia and international capital markets for portfolio expansion and exits.

• Integrity - rigorous due diligence, transparent disclosures and alignment of incentives with investors and founders.
• Entrepreneurship - operator-led support, rapid iteration and founder-friendly terms to accelerate product-market fit.
• Accessibility - lowering barriers to entry for both retail and institutional investors via technology and regulatory compliance.
• Value Creation - focusing on measurable operational improvements in portfolio firms to maximize long-term returns.
• Accountability - data-driven KPIs, regular reporting and independent oversight of fundraising and fund management activities.

• Investor base growth (1.12M registered) increases liquidity for campaigns and lowers capital costs for founders.
• Rising platform transaction volume (HK$980M in 2023) validates market demand for alternative funding channels.
• Incubation portfolio valuation (HK$1.52B) demonstrates value creation from operational support and strategic exits.
• Continued investment in compliance and product (reflected in operating spend) maintains trust and scalable operations.

• Prioritize fee-based revenue from platform services and recurring incubation contracts to reduce reliance on one-time placement fees.
• Maintain minimum cash runway of 9-12 months; cash and equivalents at end-2023: HK$80M.
• Selective equity exposure to portfolio companies with staged follow-on commitments to limit downside.

• Independent board oversight with audit and risk committees to ensure transparent investor reporting.
• AML/KYC and regulatory monitoring integrated into onboarding; ongoing stress tests for platform liquidity.
• Standardized post-funding milestones and monthly performance reporting for incubated companies.

• Deal sourcing and diligence - proprietary screening, sector specialists and third-party validation.
• Capital matching - multi-channel investor access including retail, accredited and institutional pools.
• Incubation and acceleration - product-market fit, commercialization, governance and fundraising support.
• Exit advisory - strategic M&A, secondary market listings and cross-border investor introductions.

Dragon Victory International Limited (LYL): Vision Statement

Mission pillars driving this vision:

• Provide accessible, timely funding and asset-liquidity solutions that preserve customer dignity and value.
• Innovate with data-driven underwriting and digital customer journeys to lower cost and friction.
• Operate with strong governance, regulatory compliance, and clear risk controls to protect stakeholders.
• Invest in employee capability and community entrepreneurship to amplify socio-economic impact.

Strategic objectives and measurable targets (near term - 1-3 years):

Sample performance indicators (illustrative metrics aligned to mission):

• Loan/pawn book: ~HK$1.2 billion (target scale to HK$1.44 billion with 20% growth)
• Revenue run-rate: ~HK$250 million with target CAGR to 15% over 3 years
• Employees: ~450 staff supporting retail, risk, and digital functions
• Branches/outlets: ~35 physical outlets with omnichannel integration
• Customer satisfaction: targeted CSAT ≥ 92% and NPS ≥ 45

Core Values - the behavioral backbone guiding decisions and culture:

• Innovation: Pursue pragmatic product and process innovation-data, AI-assisted underwriting, and mobile-first service-to widen access and reduce cost-to-serve.
• Integrity: Commit to transparent pricing, honest disclosures, and robust compliance frameworks across jurisdictions.
• Customer-centricity: Design services around real needs-speed, convenience, fair valuation, and respectful service for individuals and SMEs.
• Responsibility: Balance commercial returns with social outcomes-financial inclusion, consumer protection, and community entrepreneurship support.
• Excellence: Measure performance with clear KPIs and continuously raise operational and service standards.

Risk & governance alignment with the vision:

• Prudential credit policies that cap single-exposure and concentration risk to preserve capital and maintain liquidity.
• Regular independent audits, AML controls, and regulatory reporting to maintain trust with investors and regulators.
• Stress-testing of the loan/pawn book under interest-rate and collateral-value shocks, with contingency liquidity buffers equivalent to multiple months of cash flow needs.
• KPIs tied to sustainability and social outcomes (e.g., number of micro-entrepreneurs financed, consumer complaints resolved within SLA).

How mission and vision translate into customer-facing actions:

• Faster turnarounds-same-day valuation and disbursement for standard product sets.
• Transparent fee schedules and digital receipts to improve clarity and trust.
• Tiered product suites from micro-loans and pawnbroking to secured term lending for SMEs.
• Financial literacy and entrepreneurship workshops for customers and local partners.

Corporate storytelling and investor communication are supported by accessible documentation and governance transparency. For background on corporate origins, ownership and business model, see: Dragon Victory International Limited (LYL): History, Ownership, Mission, How It Works & Makes Money