Xiaomi has raised more than US$1bn in funding, raising the valuation of the Chinese smartphone manufacturer to more than US$45bn, according to reports.
The company – which provides internet services as well as its hardware – recently posted profits of €45m after turning over €3.45bn globally, with its business model of low-cost hardware clearly appealing to investors.
The Wall Street Journal reported the latest funding round closed today, which was run by former Morgan Stanley analyst Richard Ji.
Gartner recently rated Xiaomi as the fourth-largest smartphone manufacturer in the world as the chase to reel in Samsung and Apple gets more and more heated – Xiaomi is joined by the likes of Huawei, LG and Lenovo part of a tightly paced chasing pack.
However, the reeling in of tech powerhouses such as Apple and Samsung is clearly fraught with difficulties. That €45m profit represents a very small percentage of revenues, with the tight margins clearly something to be managed delicately.
However, Xiaomi is clearly aware of its restricted modes of income and is looking to diversify, investing in its first ever US company recently, Misfit Wearables. It also launched an air purifier, before investing more than €160m in home appliance firm Midea.
The latter months of 2014 have seen valuations of tech start-ups skyrocket with Uber, the ride-sharing service dogged by bad news stories, reported to be somehow worth around US$40bn, despite little to know tangible product to require capital.