San Francisco, California, start-up Misfit Wearables has raised US$40m from various investors, with Xiaomi’s stake particularly interesting.
The Chinese tech giant – recently listed as a major mover in the worldwide smartphone manufacturing rankings – has now invested in a US-based business for the first time, with JD.com also getting involved.
However, it’s China that will feel the full force of this deal, with Misfit clearly targeting the populous country in its business plan (one-third of its business originates there).
“To us, (China) is probably our favourite market,” said Sonny Vu, CEO and founder of Misfit. “It’s a vastly larger market, even when you take into consideration income differences and what not. They have 1.7bn or 1.8bn people, and it’s a super important market for us. China’s always been a very strategic market for us, because we got there early.”
The addition of Xiaomi to Misfit’s business brain will bring some much-needed understanding of scale, and indeed the Chinese market. As TechCrunch reports, this round of funding wasn’t even needed by Misfit, rather it was a networking attempt. The previous funding round’s total take is still in the bank, with the company running at break even at the moment.
“This whole thing with Xiaomi and JD.com was basically done so that we can really amplify our presence in China, and also to accelerate product development,” Vu said.
“We only have 40 people in San Francisco, so there’s only so much we can do every year, and having a partner like Xiaomi who really knows how to scale and get to production quickly, and not just them but the companies they’re invested in, that’s kind of a big deal for us.”