China-based consumer electronics producer Xiaomi has begun talks with banks over an initial public offering in 2018 that will enable mobile chipmaker Qualcomm to exit, The Information reported on Friday.
The company, which was valued at $45bn as of its last funding round in late 2014, is seeking a $50bn valuation in the offering, people familiar with the matter told DealStreetAsia. Hong Kong is currently the likeliest destination for the IPO, sources told The Information, though New York is a possibility.
Xiaomi’s core business revolves around smartphones and laptops, but it has branched out into areas such as smart televisions, battery chargers, unmanned aerial vehicles and a host of connected home products as it seeks to build a consumer electronics ecosystem around its products.
The company’s initial growth largely took place in its home country, but its affordable products have enabled it to do well in developing markets such as India, where its 24% market share in the smartphone space is only matched by Samsung, according to market research firm International Data Corporation.
The investors in Xiaomi’s last round, which closed at $1.1bn, were Singaporean sovereign wealth fund GIC, All-Stars Investment, DST Global, Hopu Fund and Yunfeng Capital.
Qualcomm has not revealed precisely when it invested in Xiaomi, but its corporate venturing unit, Qualcomm Ventures, lists it as a portfolio company.
Xiaomi raised $216m in a 2012 series C round that valued it at $4bn, and which increased its total funding to approximately $350m, its earlier investors including Morningside Ventures, IDG Capital and Shunwei Capital.
The company added an undisclosed amount at a $10bn valuation in a series D round the following year. Its investors also include Qiming Venture Partners.
– Image courtesy of Xiaomi