Xiaomi Seeking Funding That Would Value It at Over $40 Billion: Reports

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By NDTV Correspondent | Updated: 5 November 2014 11:16 IST

After briefly becoming the world's third largest smartphone vendor - before being displaced again by Lenovo thanks to the completion of its acquisition of Motorola - Xiaomi could well be on its way to becoming the world's most valuable privately held tech company, according to reports.

According to a report in Forbes, Xiaomi is exploring fundraising options that could value the company at over $40 billion, which would make it the world's most valuable private company.

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Some reports on Tuesday placed the possible valuation even higher, at about $50 billion, which is five times higher than the last financing round in 2013 which valued Xiaomi at $10 billion.

Along the way, Xiaomi has repeatedly faced concerns about security, concerns that are largely based around the company being headquartered in China. However, the company has been responsive and with an eye on Western markets starting with Brazil, it has started to take steps to address these fears.

If the funding comes through at the reported valuation, then Xiaomi would be bigger than competitors like Sony (market capitalisation of $19.5 billion) and Lenovo (market value of $15.6 billion). This is the second big success story in the tech sector from China this year, following the record breaking IPO of Alibaba, which has a market capitalisation of nearly $220 billion.

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And unlike most of its competitors, Xiaomi is still only available in just a few countries - places with huge numbers like China and India, admittedly - but it's still not reached the Western markets and this means that the scope for growth remains very high, unlike other brands which are already present in most markets.

The company has frequently been called "the Apple of China", much like Alibaba was described as "the eBay of China". Today, Alibaba eclipses eBay and Amazon - but for now at least, Apple remains a much bigger brand, and according to a study released last month by consultancy Interbrand, is worth an estimated $118.9 billion.

 

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Further reading: Android, Mobiles, Xiaomi
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