Xiaomi to raise $1.5b in latest funding boost

(Xinhua) Updated: 2014-11-09 15:31

Lei Jun, founder and CEO of China's mobile companyXiaomi, speaks at a launch ceremony of Xiaomi Phone 4, in Beijing, July 22, 2014. [Photo/Agencies]

BEIJING -- Chinese smartphone manufacturer Xiaomi Inc. is talking to investors and banks to raise about $1.5 billion in its fifth round of financing, local media reported.

The fundraising target is roughly $1.5 billion, which would be the largest investment (excluding IPO) raised by any Chinese company backed by venture capital, financial news website Jiemian of the Shanghai United Media Group reported on Saturday.

One of the investors is said to be DST Global, a London-based investment firm that focuses on Internet companies, Jiemian said in the report.

Xiaomi, currently the world's third-largest smartphone maker after Samsung and Apple, will use most of the money raised to develop video content for Xiaomi TV, according to the report.

Xiaomi has said it will spend about $1 billion to expand its own TV content. It hired Chen Tong, former editor-in-chief of popular news portal Sina.com, to revamp its Internet video business.

Xiaomi founder and CEO Lei Jun said that Xiaomi shipped 18 million smartphones in the third quarter, an increase of 18 percent from the previous quarter.

For the first nine months, Xiaomi, whose name means "millet" in Chinese, shipped a total of 44 million units, Lei said.

Xiaomi was founded in April 2010 by Lei and his friends in Zhongguancun, Beijing's technology hub, which has been called "China's Silicon Valley." Xiaomi's first smartphone debuted on Aug. 16, 2011.

In another development, Hong Kong-based South China Morning Post reported on Thursday that Xiaomi Inc., which is valued at $50 billion, is aiming for an initial public offering as early as next year.

"Xiaomi is one of the large Chinese technology companies that would tap the IPO market next year," the newspaper quoted a source as saying. "Hong Kong investors seem to be more receptive of hardware than software firms, making the city the likely IPO destination for Xiaomi."

The current market appetite for technology firms with a clear growth outlook, such as Alibaba Group, is an incentive to do it soon, the newspaper said.

Xiaomi is seen by investors as the most likely candidate to become the next "Chinese IT legend" after Alibaba, which completed a $25 billion IPO in the United States in September.

Global market researcher International Data Corporation (IDC) said in its latest report that Xiaomi jumped onto the list of top 5 manufacturers for the first time at the number 3 position thanks to its focus on China and adjacent markets, which resulted in triple-digit year-over-year growth.

In the third quarter of this year, Xiaomi's global market share stood at 5.3 percent, following Samsung's 23.8 percent and Apple's 12 percent, according to IDC.