The valuation of Xiaomi, a privately owned Chinese electronics company could reach more than $100 billion, according to investor Yuri Milner. Xiaomi is the largest smartphone distributor in China and third-largest worldwide.
Today, Xiami announced that it raised $1.1 billion funding from investors bringing its valuation to $45 billion. Xiaomi cemented its position as one of the most valuable privately owned technology companies with its current valuation.
Some of the Xiaomi’s investors during its latest round of funding include Milner, DST Global, Hopu Investment Management, Singapore’s sovereign wealth fund GIC Pte and All-Stars Investment Ltd.
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Xaiomi revenue growth is unprecedented
In an interview with Bloomberg, Milner expressed his belief that Xiaomi has the same potential as Facebook Inc FB) and Alibaba Group Holding Ltd. (BABA).
Milner said, “I was attracted by the size of the opportunity ahead of them. I don’t think there’s any company that has reached $1 billion in revenue as fast as Xiaomi. In every conceivable benchmark, it’s almost unprecedented in terms of its speed of growth.”
Lei Jun, the founder and CEO of Xiaomi is expanding its business operations overseas. The company expanded its operations in India, Indonesia, Malaysia, Singapore, Malaysia, and Philippines this year. It is planning to establish its business in Brazil, Mexico, Russia, Thailand and Turkey next year.
The company surpassed the smartphone sales of Samsung Electronics Co Ltd (005930) in China by luring consumers with high-end features and low prices. The company is planning to sell 100 million smartphones next year, and it is currently expanding in content and services.
Xiaomi has potential to become China’s first global brand
Milner believed that Xiaomi has significant potential to become China’s first global brand. He added that the company’s smartphones can capture substantial market share worldwide, and emphasized that the business the does not represent the whole opportunity for the company.
“There are a number of other interesting categories that Xiaomi can target,” said Milner.
Neil Shah, a research director at Counterpoint Research in Mumbai estimated that Xiaomi’s revenue could reach more than $12 billion. Its $45 billion valuation is 3.75 times the estimate of Shah for this year.
Meanwhile, Gartner’s analyst Sandy Shen commented, “It is the expectation that Xiaomi will be able to establish an ecosystem like that of Apple that includes hardware, software and services, an ecosystem that works not only over mobile phones but also other devices.”