Xiaomi seeks a valuation of at least $ 50 billion in IPO – tech2.org

Xiaomi seeks a valuation of at least $ 50 billion in IPO



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Lulu Yilun Chen and Peter Elstrom

Xiaomi Corp., the Chinese smartphone maker that was once the most valuable startup in the world, is in talks with investment banks about an initial public offering and seek a valuation of at least $ 50 billion, from agreement with people familiar with the matter.

The Beijing-based company is considering an offer as early as next year with banks suggesting Hong Kong as the most likely destination, people said, requesting not to be named because the matter is private. While banks have talked about Xiaomi's prospects as they seek to win the mandate, they are concerned if the company can reach the $ 50 billion level, much less a $ 100 billion target that some top executives have adopted, the companies said. people. Xiaomi raised money for the last time in 2014 $ 46 billion valuation.

Photographer: Dhiraj Singh / Bloomberg

Xiaomi has gained momentum in recent months after encountering local rivals such as Huawei Technologies Co. and Oppo. The company, led by Lei Jun, has invested aggressively in retail stores and in India. is now overtaking Samsung Electronics Co. in the country, the fastest growing smartphone market in the world. A successful initial public offering can bring in at least $ 5 billion, much-needed ammunition for expansion, people said.

Kaylene Hong, a spokeswoman for Xiaomi, says the company does not comment on IPO issues. Over the weekend, Lei denied a report in The Information that Xiaomi is considering an initial public offering as early as the second half of 2018, according to Sina.com.

Founded in 2010, Xiaomi, or Little Rice, made its mark with online marketing campaigns, avoiding traditional retail stores. By 2014, its formula of fast sales and intelligent social networks helped it to position itself in the Chinese smart phone ranking and accumulated the valuation that made it briefly the highest in the world, before it was surpbaded by Uber Technologies Inc. Lei , who often sported black collars compared to Steve Jobs, of Apple Inc.

But Xiaomi staggered last year, with shipments crashing into fierce local competition. The company ranks fifth in shipments of Chinese phones in the first quarter, according to research firm IDC. Oppo and its counterpart Vivo punished the company by developing strong ties with retailers in small cities and rural areas of China.

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Lei has revived the company by expanding its product line, geographical reach and sales channels. Xiaomi is making a breakthrough in antiquated retail: plans to build 1,000 stores "Mi Home" by 2019, approximately twice the total number of Apple stores, with a retail sales target of 70 billion yuan by 2021 [19659009] Lei has also strongly opted for expansion abroad, especially in India. In an interview in March, he said that Xiaomi would double its investment in the country, spending another $ 500 million over the next three to five years.

The new Redmi Note 4 from Xiaomi sold about 250,000 units in a matter of minutes on top of the online Indian retailer Flipkart.com, as well as its own online site, the company said. The Beijing-based company reached $ 1 billion in Indian revenue for 2016.

Xiaomi is now focusing on a selection of emerging markets, including Russia and Indonesia. The company has said it also intends to establish a presence in the United States, where it remains in the sale of phones in favor of devices such as fitness bands. Xiaomi now aims to send 100 million smartphones next year, reliving a goal he had abandoned during his difficult days.

"We face many challenges, many negative reports about us," Lei said during the March interview. "But it was never as bad as it was supposed to be, we have returned to healthy growth, we will resume rapid growth in the next two years."

– With the badistance of Yuan Gao

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