Xiaomi Raises $1.1 Billion To Push Company Valuation To $45 Billion

Outside of business tech, the Xiaomi name is almost an unknown on these shores. But, there’s a handful of reasons why the company is worth watching, because in time, it could very well make a big impression on the US market.

For example, consider the fact that this hardware vendor was founded in 2010 but is already valued at $45 billion. The company reached its first $1 billion in record time, and some analysts believe the company’s on track to double its value over the next couple of years. Again – this company is barely five-years-old, yet it’s already surpassed Samsung’s smartphone shipments in China.

Xiaomi’s Redmi Note

At the rate Xiaomi is growing, I don’t think it’s unreasonable to believe that at some point, it could match Apple’s global shipments, although while that could become the case, Xiaomi’s profit margins are far lower. So low, in fact, that the company during 2013 operated on a meager 1.8% margin. On the flipside, that thin margin is the reason the company has skyrocketed to stardom: It’s offering great devices at unbeatable prices. So while the company isn’t making an immense profit at he moment, consumers are at least benefiting.

With a new cash-infusion of $1.1 billion, it looks like Xiaomi’s momentum isn’t going to be slowing down anytime soon. It’s worth noting that one of the investors is Alibaba founder Jack Ma’s Yunfeng Capital. In recent months, Jack officially became the wealthiest man in China, thanks in large part to a record IPO that instantly pushed his company’s value to $236 billion (now $268 billion – Walmart is $279 billion, by comparison).

Given Xiaomi’s rise, it could lead to companies that offer products here adding more low-cost models to their lineup, but for the most part, North American vendors have little to worry about right now. Xiaomi currently offers its products in many Asian countries, with plans to move into Mexico, Brazil, Turkey, and others, in 2015. There’s been no mention of expanding into the US market, though once again, if this growth continues, it does seem possible that the company would target North America and other parts of Europe in the future.