Xiaomi's founder Lei Jun has confirmed that, in its latest funding round, the company's new valuation has reached $45 billion. The $1.1 billion worth of funding has enabled the Chinese company to earn the title of being the most valuable technology startup in the world.
At such value, Xiaomi is now above all the other startup companies that are being backed by venture capitalists. This includes the taxi-booking company Uber Technologies, which recently announced its new valuation of $41 billion following a new funding boost.
"This round of funding is an affirmation of Xiaomi's achievements in more than four years of business and a prelude to a new stage of development," said Lei. The latter announced the funding round on his Chinese microblog account.
Investors of the funding included Singapore sovereign-wealth fund GIC Pte. Ltd, Russian investment firm DST Global, All-Stars Investment Ltd, and private equity firm Yunfeng Capital, which is affiliated with Jack Ma of Alibaba.
The price tag of the latest funding shows how investors have confidence in the growth potential of Xiaomi. Currently, it is China's largest smartphone maker based on shipments record. Globally, it is the fourth largest.
Earlier this month, Lei was named "Businessman of the Year" by Forbes Asia. When interviewed by the publication, Lei said that he made a mistake when he said four years ago that Xiaomi could only have as much as $10 billion in value.
"I had only worked with companies worth about $1 billion," said Lei. "I had never seen anything worth $100 billion."
On Nov. 19, Lei had spoken at an industry conference held in China wherein he revealed a new goal of leading the world in smartphones within a span of five to 10 years. This is in addition to his ambitious valuation target of $100 billion.
Investors are hoping that the Beijing-based technology startup can go beyond creating cheap smartphones while achieving a more lucrative business at the same time.
Some of the possible ventures include building software and services that would cater to the users of its devices. The company is also seen as having a great potential to earn success in home electronics that are Internet-connected.
Xiaomi's recipe for success is quite simple. The company retails its devices at rock-bottom prices, which then allows users to access its apps and other services, its real money maker.
Moreover, it has been placing a huge investment on other manufacturers as part of its plan to build an ecosystem made up of Internet-connected appliances and devices. This means that the company sees the future as something that goes beyond creating smartphones.
