China's Xiaomi has no plans to raise new funds for now: VP

The Pak Banker - - COMPANIES/BOSS -

HONG KONG: China's most valu­able start-up Xiaomi Inc is fi­nan­cially self-suf­fi­cient and has no plans to raise new funds for now, its global vice-pres­i­dent said on Mon­day, even as it is un­der­tak­ing a planned ex­pan­sion in In­dia.

Xiaomi, the world's fifth-largest smart­phone ven­dor, also has no im­me­di­ate plans for an ini­tial pub­lic of­fer­ing, Hugo Barra told Reuters in an in­ter­view. The com­pany has "no need to raise more money and no plans to raise more money. No plans for now. No IPO plans ei­ther," he said.

Xiaomi is ex­pand­ing its pro­duc­tion ca­pac­ity in In­dia, aim­ing to build two new fac­to­ries with Tai­wan's Fox­conn this year in ad­di­tion to one they cur­rently op­er­ate to build phones lo­cally. Xiaomi cur­rently pro­duces in In­dia 75 per­cent of the phones it sells there and aims to raise that to close to 100 per­cent with the new fac­to­ries, Barra said. The com­pany last raised funds from in­vestors in De­cem­ber 2014, tap­ping pri­vate equity funds in­clud­ing All-Stars In­vest­ment and DST Global, as well as Sin­ga­pore sov­er­eign wealth fund GIC Pte Ltd [GIC.UL] for $1.1 bil­lion at a val­u­a­tion of $45 bil­lion.

The funds have been used to in­vest in more than 50 star­tups in­clud­ing video con­tent providers in a bid to in­crease rev­enue from In­ter­net ser­vices such as games and mo­bile pay­ment apps that of­fer higher profit mar­gins than handsets, Barra said. "All the money we have raised is al­lo­cated to in­vest­ments. From an op­er­a­tions point of view, our busi­ness has been self-funded for some­time," Barra added.

Xiaomi missed its 2015 global ship­ment tar­get by 12 per­cent, sell­ing 70 mil­lion handsets in a year when lo­cal ri­vals such as Len­ovo Group Ltd and top player Huawei Tech­nolo­gies Co Ltd [HWT.UL] coun­tered at home with sim­i­lar In­ter­net-only sales.

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