Guess which start-up has become the world’s most successful tech-related start-up? The company is known as Xiaomi and it manufactures smartphones. It is also known as Apple of China. Xiaomi has been valued at $45 Billion and managed to get to this status within a span of 4 years. The company bagged this achievement by manufacturing a number of mobile phones that were economical and succeeded to attract a plethora of customers.
Xiaomi is now worth more than Uber, the taxi app. Uber went on the market valued at more than $18.2 billion (£11.7 billion). It is believed by the investors that Xiaomi has the potential to become a global consumer brand and to obtain this result, they have poured in cash in recent months.
Jack Ma has also invested in Xiaomi by making use of a private equity group. For those of you who are not aware of what Jack Ma is, it is the leader of Alibaba – Chinese e-commerce tycoon! Among other investors, Jack Ma is the early investor of Facebook as well. Venture capitalist Yuri Milner has invested more than $500 million (£321 million) in Xiaomi, saying that Xiaomi was ‘unprecedented in terms of the speed of its growth’. He even predicted that the company’s value could get as high as $100 billion (£64 billion).
Xiaomi whose products come with a logo of ‘Mi’ has become the third largest smartphone maker in the world, behind Apple and Samsung. The design of a Xiaomi smartphone is quite similar to that of Apple and that is why it is known as, as mentioned before, ‘Apple of China’. It even produces an MiTV similar to AppleTV and has its own MiCloud, like Apple’s iCloud.
Executives at Apple have reacted harshly to this semblance. The vice president of design at Apple, Sir Jonathan Ive, accused Xiaomi of theft. Apple currently values around $651.5 billion (£418.6 billion). Revenues of Xiaomi have increased by 300 percent last year and are $5.5 billion (£3.5 billion) now. The profit last year was just a small $56 million (£36 million), a figure that the investors believe will increase very sharply soon.
Xiaomi’s revenue, according to sources, stands at the same amount at what the company was priced at last year – $10 billion. The company has plans for further expansion and has even pitched investment with Google. It might very well soon be targeting US or Europe with its pricing strategies after being famous for its tactical planning in China where it managed to sell 100,000 phones in under 90 seconds for $130 through Internet promotions.
Chief Executive and Founder Lei Jun announced the new valuation of Xiaomi in his statement. According to him, “This fundraising round is in recognition of the results Xiaomi has achieved in the last four years since inception, and also unveils the next chapter of development for Xiaomi. Xiaomi will assume we are starting from scratch, and continue working towards our dream to let everyone globally enjoy a better life through technology. Xiaomi will launch some heavyweight flagship products in January 2015 to show gratitude to the fans, partners and investors who have been supporting us.”
Milner said that he was attracted to Xiaomi instead of Uber, because of the ‘size of opportunity ahead of them’ for Xiaomi. He shared his views in an interview and further added, “I don’t think there’s any company that has reached $1 billion in revenue as fast as Xiaomi. In every conceivable benchmark, it’s almost unprecedented in terms of its speed of growth.”