China-based consumer electronics producer Xiaomi is set to invest up to $1bn in 100 India-based startups over the next five years, LiveMint reported yesterday.
Xiaomi has joined forces with its venture capital affiliate Shunwei Capital as it seeks to build an ecosystem of mobile apps around its smartphones. Its investments will focus on manufacturing, entertainment content, fintech and hyperlocal services such as phone repairs.
The corporate, which entered India in 2014, hopes the investments will help create more loyalty among Indian users who, research has indicated, have been driven by a wish to own the most up-to-date, popular devices, regardless of brand.
The approach would differentiate Xiaomi from Chinese corporate venturing peers such as e-commerce group Alibaba and internet company Tencent, which have also been investing in India but have not focused on locking in customers to their own offerings.
Xiaomi currently shares leadership of India’s smartphone makret with South Korea-based electronics manufacturer Samsung, with each accounting for 23.5% of shipments in Q3 2017.
Lei Jun, Xiaomi’s CEO, also revealed the company has no plans for an initial public offering any time soon. Xiaomi was valued at $45bn as of its last round, a $1.1bn series E in 2015, and its shareholders include Shunwei and semiconductor producer Qualcomm.
Lei said: “In China, in the past four years we have invested $4bn in over 300 companies. In the next five years, we will invest in 100 companies in India. We will basically replicate the most successful ecosystem business model of China in India.
“We will have all types of services and products and integrate them. That is the Xiaomi business model. We focus on a few key things and everything else, we let our partners provide. We have reached just a huge scale in seven years because of this partnership/affiliation model.
“Any apps that increase the frequency of usage of smartphones – we are interested in this. As long as it is related to acceleration of mobile internet. We only pick minority stakes. The purpose is to work closely (on the business side) with these companies.”