Chinese smartphone maker Xiaomi received an investment that values the private company at $10bn – giving the three-year-old group a valuation equal to that of Lenovo, the world’s largest PC maker.
That valuation is a significant jump from the $4bn Xiaomi said it was valued at in its prior round of funding, and comes as Chinese-made smartphones are emerging as serious competitors to brands such as Apple and Samsung both at home and overseas.
Xiaomi’s founder, Lei Jun, confirmed the valuation with a post to his Weibo microblog but did not offer further details as to the size or source of the new funding.
“Indeed it is done. Thank you everyone,” he posted. More details, he said, will be announced at a significant event the company has planned for September 5.
Xiaomi overtook Apple within China in the second quarter to become the sixth-largest smartphone maker by market share, according to market research group Canalys. Xiaomi had 5 per cent of the market, against Apple’s 4.8 per cent.
The company, whose name means “Little Rice,” has emerged as one of the darlings of China’s consumer technology industry.
Xiaomi phones use relatively high-end components but cost less than comparable Samsung or Apple models. Many compare it with Apple for its ability to build up a level of buzz before product launches. It also makes money from its own digital game platform and social messaging app, MiLiao.
“Xiaomi is also an internet company,” Mr Lei said in a recent interview with the FT.
The company’s investors include Singapore sovereign wealth fund Temasek and Qualcomm, the US chip company. In its last round of fundraising completed a year ago, it raised $216m.
Internet company Tencent, which partnered with Xiaomi on its latest phone, has been widely rumoured as a potential investor but declined to comment.
Xiaomi sells phones directly to consumers and releases them in limited batches, most of which sell out quickly. Its most recent phone, a low-cost device named Red Rice priced at Rmb799 ($130), sold out its first batch of 100,000 phones in just 90 seconds, the company said on its microblog.
While Xiaomi’s phone ship solely in greater China, its rise comes as many other Chinese smartphone brands have become international contenders. Lenovo’s global market share in phones nearly doubled to 4.7 per cent last quarter, according to research from Gartner. Apple’s market share in that time fell from 18.8 per cent to 14.2 per cent.
A valuation that puts Xiaomi on par with Lenovo, however, has raised some questions about how it will fulfil its investors’ expectation for growth.
“Lenovo definitely has a much deeper business line and a wider product portfolio, so if you think of it that way there’s something not quite right somewhere,” said Teck-Zhung Wong, a senior analyst with IDC. He added: “They’ve been very clever with their marketing, and of course they have a good product. The question is, can they keep doing it, which everyone is also asking about Apple.”
Additional reporting by Julie Zhu
Copyright The Financial Times Limited 2013. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
That valuation is a significant jump from the $4bn Xiaomi said it was valued at in its prior round of funding, and comes as Chinese-made smartphones are emerging as serious competitors to brands such as Apple and Samsung both at home and overseas.
Xiaomi’s founder, Lei Jun, confirmed the valuation with a post to his Weibo microblog but did not offer further details as to the size or source of the new funding.
“Indeed it is done. Thank you everyone,” he posted. More details, he said, will be announced at a significant event the company has planned for September 5.
Xiaomi overtook Apple within China in the second quarter to become the sixth-largest smartphone maker by market share, according to market research group Canalys. Xiaomi had 5 per cent of the market, against Apple’s 4.8 per cent.
The company, whose name means “Little Rice,” has emerged as one of the darlings of China’s consumer technology industry.
Xiaomi phones use relatively high-end components but cost less than comparable Samsung or Apple models. Many compare it with Apple for its ability to build up a level of buzz before product launches. It also makes money from its own digital game platform and social messaging app, MiLiao.
“Xiaomi is also an internet company,” Mr Lei said in a recent interview with the FT.
The company’s investors include Singapore sovereign wealth fund Temasek and Qualcomm, the US chip company. In its last round of fundraising completed a year ago, it raised $216m.
Internet company Tencent, which partnered with Xiaomi on its latest phone, has been widely rumoured as a potential investor but declined to comment.
Xiaomi sells phones directly to consumers and releases them in limited batches, most of which sell out quickly. Its most recent phone, a low-cost device named Red Rice priced at Rmb799 ($130), sold out its first batch of 100,000 phones in just 90 seconds, the company said on its microblog.
While Xiaomi’s phone ship solely in greater China, its rise comes as many other Chinese smartphone brands have become international contenders. Lenovo’s global market share in phones nearly doubled to 4.7 per cent last quarter, according to research from Gartner. Apple’s market share in that time fell from 18.8 per cent to 14.2 per cent.
A valuation that puts Xiaomi on par with Lenovo, however, has raised some questions about how it will fulfil its investors’ expectation for growth.
“Lenovo definitely has a much deeper business line and a wider product portfolio, so if you think of it that way there’s something not quite right somewhere,” said Teck-Zhung Wong, a senior analyst with IDC. He added: “They’ve been very clever with their marketing, and of course they have a good product. The question is, can they keep doing it, which everyone is also asking about Apple.”
Additional reporting by Julie Zhu
Copyright The Financial Times Limited 2013. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.