Xiaomi seeks $1.5B in new funding round

Xiaomi is reportedly looking to raise some US$1.5 billion in a new round of funding, and if successful, will be the largest VC investment generated by a Chinese company.

This would be the handset maker's fifth fund-raising exercise and is said to include U.K. investment firm DST Global, which also invested in Alibaba and Facebook. The bulk of the money generated would go toward developing video content for Xiaomi TV, reported local news agency Xinhua, which cited financial news website Jiemian.

Xiaomi last month said it was investing up to US$1 billion to expand its internet TV offerings. Its focus in the sector would pit the Beijing-based company against its local peers that have invested in the online TV market, including Alibaba, Tencent, and Baidu. 

The news comes after Xiaomi reportedly saw its net profit nearly double over the last two years, according to a WSJ report, which cited a document the Chinese company presented to banks in its proposal for a US$1 billion loan to be used in overseas expansion or acquisition.

The document revealed that Xiaomi's revenue more than doubled to 27 billion yuan (US$4.39 billion), while net profit climbed 84 percent to 3.46 billion yuan (US$563 million) in 2013 over the previous year. It is projecting a 75 percent growth in net profit this year.  

According to Xiaomi's founder and CEO Lei Jun, the company grew its smartphone shipment by 18 percent over the previous quarter to 18 million smartphones in the third quarter. It shipped 44 million units in the first nine months alone, he said.  

IDC numbers put the Chinese company's global market share at 5.3 percent in the third quarter, placing Xiaomi in the Top 5 vendor list for the first time at third position. It follows market leader Samsung's 23.8 percent and Apple's 12 percent.

Should it secure the latest round of US$1.5 billion in investment, Xiaomi's market valuation will exceed US$40 billion, according to The Financial Times.