Dow Jones Newswires, citing a person familiar with the issue, said the latest round of funding could close as soon as Monday.
It was being led by tech investment fund All-Stars Investment and also involved were current shareholders Russian investment firm DST Global and Singapore sovereign-wealth fund GIC, the report said.
Private-equity firm Yunfeng Capital which is affiliated with Alibaba Group Holding Ltd. chair Jack Ma, was also taking part.
Established only four years ago, Xiaomi was valued at $10 billion (roughly Rs. 63,212 crores) in a previous round of funding in August 2013.
A company spokesman declined to comment, the report said.
Mainland China is the world's largest smartphone market, and Xiaomi's cheap, feature-packed handsets ousted Samsung as the top seller there in the second quarter.
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