The series E funding marks a victory for Bin Lin and founder Lei Jun, as well as its corporate venturing backers such as Qualcomm Ventures – an early backer of the company.
The funding was raised from investors including All-Stars Investment, DST Global, GIC, Hopu Fund, Yunfeng Capital and Ratan Tata, chairman Emeritus of India-based industrial group Tata Sons.
Xiaomi raised a total of $347m across its series A, B and C rounds, but did not disclose the size of its 2013 series D round, which was raised at a $10bn valuation.
IDG Capital, an affiliate of media company International Data Group, led Xiaomi’s $90m series B round in 2011, which also included participation from Qualcomm, Singaporean sovereign wealth fund Temasek, Shunwei Capital and Qiming Partners.
The series E round was raised to accelerate Xiaomi’s online video offerings and its launches into new markets including the US, according to international vice president Hugo Barra. Its entry into the US market is anticipated to take place this year, and will be achieved trhough either the services or headset product lines.
Xiaomi became the single largest smartphone seller in China in 2014, giving it a competitive edge over Apple and Samsung.
The company is keen to dig into India’s hungry appetite for smartphones, which makes the investment by Ratan Tata, its first Indian backer, a smart move. Xiaomi has not revealed the size of Tata’s stake, but did confirm that he would be brought on board as an advisor.
Xiaomi first entered India when it released the Mi 3 smartphone in the country in July 2014, and has been selling the phone through an exclusive agreement with e-commerce company Flipkart.
The company has increased its focus on India, reported to be the world’s fastest growing smartphone market and third in terms of volume, and is set to release a dedicated phone for the market.
Xiaomi announced a 135% year-on-year increase in full-year revenue in 2014 to RMB 74.3bn ($11.9bn), and sales of its phones increased more than 200% over the same period to reach 61 million for the full year.
The smartphone manufacturer is also formng strategic partnerships with other retailers to widen its sales reach. In 2014 Xiaomi invested close to $205m for a 1.3% stake in China electrical appliance maker Midea Global as part of a strategic partnership agreement.
The partnership model will be replicated with up to 100 hardware manufacturers, with a view to selling Xiaomi’s products on their online stores. Companies that have already formed alliances include wearable products makers iHealth and Misfit.
Shortlist
Magic Leap – $542m – Google, Qualcomm Ventures
napdeal – $627m – Softbank, eBay, Intel Capital
Vice Media – $250m – A&E Television Networks, 21st Century Fox, WPP HTC
Kuaidi Dache and Didi Dache ($1.3bn raised by both, ahead of merger) – Alibaba, Tencent, Softbank Internet
Uber – $1.8bn – Baidu, Google Ventures, Times Internet
Flipkart – $1.9bn raised in 2014 – Naspers
Legendary Entertainment – $500m – Softbank
Xiaomi – $1.1bn – Qualcomm Ventures