Xiaomi planning $1bn spending spree in Indian start-ups

20 Nov 2017

A Xiaomi sign. Image: testing/Shutterstock

As it continues to assert its place in the mobile marketplace, Xiaomi is now turning to India to build a strong app ecosystem.

With China now accounting for almost half of the global smartphone marketshare, companies such as Xiaomi are trying to assert dominance in the hotly contested market.

While one of the fastest-growing brands year on year, Xiaomi is now seeking to build its own app ecosystem to take on the might of its biggest rival, Huawei.

According to Livemint, Xiaomi CEO Lei Jun said that in order to do this, it will turn to the next-nearest smartphone market giant, India, with a planned investment of $1bn in start-ups in the country. This investment would cover 100 Indian start-ups over the course of five years.

Xiaomi has already begun by buying stakes in six major internet companies, including Hungama and KrazyBee, both directly and through its sister company, Shunwei Capital.

The Xiaomi business model

Lei said that the plan will be to replicate what it has done in China, where it has invested $4bn in 300 different companies.

“We will have all types of services and products and integrate them. That is the Xiaomi business model,” Lei said.

“We focus on a few key things and everything else, we let our partners provide. We’ve reached just a huge scale in seven years because of this partnership/affiliation model.”

The focus for Xiaomi’s funding will be on companies that could provide smartphone apps to keep people glued to their phones, such as entertainment content.

Should everything go as planned, Xiaomi would become one of the biggest investors in the Indian internet market. However, it said that it will only be involved in minority stakes, rather than outright takeovers.

While the company’s phones remain highly popular in China and India, its sales are increasing gradually elsewhere, most recently seen in Russia, where it is now the fifth-largest smartphone provider.

A Xiaomi sign. Image: testing/Shutterstock

Colm Gorey was a senior journalist with Silicon Republic