Chinese phone manufacturer Xiaomi setting up own VC firm: Report

Photo from Xiaomi's Facebook page.

Chinese mobile phones and consumer electronics manufacturer Xiaomi is setting up its own venture capital firm, after investing in about 270 companies, with a registered capital of Rmb200 million ($29 million), according to a 36Kr report.

No further details were provided about Xiaomi’s venture capital firm, but the report said the company, which will be 100-per cent owned and controlled by the Chinese manufacturer, will focus on venture capital investing and consulting.

Founded in April 2010, the Beijing-based Xiaomi manufactures and distributes mobile phones and consumer electronics. It also develops mobile applications.

Its products include Redmi, an Android smartphone; MIUI ROM, a customizable ROM; MiTalk, a messaging application; Mi TV, a 3D television; MiBox, a set-top box; MIUI, an operating system; MiWiFi, a network router; MiPower Bank, an external battery; and more.

According to its first quarter financial results, Xiaomi generated almost Rmb43.8 billion ($6.3 billion) in revenue, up 27.2 per cent year-on-year, and net profit of Rmb2.081 billion, beating the analysts forecasts of Rmb41.76 billion in revenue and Rmb1.857 in net profit.

The company’s international business posted Rmb16.8 billion, up 34.7 per cent year-on-year, while its smartphone segment brought in Rmb27 billion, up 16.2 per cent from the previous year, with 27.9 million units shipped during the quarter.

The company also revealed that it had invested in 270 firms with a total book value of Rmb29 billion. At least 10 companies under its portfolio have successfully gone public.

Its latest investments include its backing of the $30-million Series C round in Beijing-based power bank rental firm Energy Monster in April. It also led the Series B round in Internet technology firm Qinlin Technology and the $80-million Series C in Zuiyou, a Chinese social networking mobile application.

In March, Xiaomi infused Rs3,500 crore ($507 million) into its Indian entity, marking its largest investment into the country since it foray about four years ago.

Xiaomi entered India in July 2014, and currently has four offices across Bengaluru, Delhi NCR, Mumbai and Kolkata. It sells smartphones under popular brands like Redmi and Mi.

India is a key market for the Chinese company as demand back home is shrinking. But the competition is getting fiercer between both Xiaomi and Samsung as both are eyeing a larger share of the Indian market.

Xiaomi’s founder and chief operating officer Lei Jun earlier said that the smartphone maker plans to invest about $1.5 billion into connected homes-related products and services.

Lei is also closely associated with Chinese venture capital firm Shunwei Capital, which raised $1.21 billion for its new funds – Shunwei China Internet Fund IV and Shunwei China Internet Opportunity Fund III.

Lei and veteran investment manager Tuck Lye Koh founded Shunwei in 2011. The firm seeks to invest in the technology, media, telecommunications, high technology, new media, games, internet finance, and rural area internet sectors.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.