China's Xiaomi Inc plans to invest in Indian tech startups and overseas media content, as the world's No.3 smartphone maker looks to dominate homes with its own TVs and appliances.
Just three years after selling its first handset, a $1.1 billion (roughly Rs. 6,810 crores) round of fund-raising announced in December valued the privately held company at $45 billion (roughly Rs. 2,78,613 crores), making it the world's most valuable tech startup.
With Samsung Electronics Co Ltd and Apple Inc in its sights in the handset market, Xiaomi is now expanding into home appliances and television. The Beijing-based company has already reserved $1 billion (roughly Rs. 6,191 crores) for Internet TV content.
"Where we really want to make significant investments is in content, particularly in the Chinese market to start with but beyond that in other markets as well," Hugo Barra, vice president of Xiaomi's global division, said in an interview on Friday.
Taking a leaf from Samsung's book, Xiaomi's recent investments include a Chinese electronics maker as part of a strategy to build an Internet-of-things environment, where devices can be controlled by smartphones.
"One area that we are also looking to make some investments in is startups in India. India is already the largest market for us outside of mainland China," Barra said, without elaborating on the types of startups.
Xiaomi has had mixed success in India. Sales of its handsets were suspended there after telecoms equipment maker Ericsson filed a complaint alleging infringement of intellectual property rights. Partial sales were permitted from December though the case is yet to be settled.
Barra dismissed concern that overseas expansion could be stalled by allegations of IP violation, and said Ericsson's lawsuit doesn't affect day-to-day operations.
"We have licensed a lot of intellectual property already," he said. Xiaomi licenses others' intellectual property, but some claims made against the company are illegitimate and Xiaomi will fight those, Barra said.
Critics say Xiaomi is unwilling to expand into Western markets because it still has too few patents to compete.
"It doesn't have anything to do with intellectual property," said Barra. "It has to do with the fact that we have much more significant opportunities in developing markets, where our model of selling very high specification devices at really aggressive prices is much more powerful."
"These are larger populations when you add them together than the Western world."
On Monday, Reuters exclusively reported that Chief Executive Lei Jun and Facebook Inc counterpart Mark Zuckerberg discussed a potential investment by Facebook in China's top smartphone maker ahead of last month's fundraising, but a deal never materialised.
Barra declined to comment on Xiaomi's cooperation with Facebook, beyond saying they had a very good relationship.
© Thomson Reuters 2016