

Xiaomi raises $1.1B on a $45B valuation - moritzplassnig
https://www.facebook.com/permalink.php?story_fbid=621872077939179&id=454663297993392

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echoless
Looks like they've got the war-chest ready to defend against future lawsuits
when they get into markets that actually take IP laws seriously.

Their hardware's actually decent, but they shamelessly ripoff Apple. They
could have gone the route of providing the same hardware with stock android
and getting treated like a credible company. Instead, they ripped off iOS
wholesale.

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smackfu
Why would they bother going into the EU or US?

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Giulalbez
Their phones are already getting there, anyway.

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WhitneyLand
Will someone please explain this valuation? A company with very thin margins,
no defendable IP, and very little barrier to entry for competitors. Yes I've
noticed they seem to be executing well and starting international expansion
but I can't see how investors get past the first three points.

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akhatri_aus
Its probably something to do with their revenue growth. While they have razor
thin margins, its very easy to increase them once there's some kind of brand
established.

There's probably that bit of 'unknown' in there too, being that the company
may be able to penetrate the Chinese market in creating a desirable product
very well. The unknown being the Chinese market could be significantly larger
than western markets in terms of how a single company could scale its sales in
the single geographic location in such a way that history may not have seen
before.

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steveax
Very easy to increase margins? Historically, this is very difficult for
companies to do. What makes Xiaomi special in this aspect?

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akhatri_aus
It's building recognisable brand, and that too a fairly good one. Historically
it's been quite easy for companies that do this to raise margins. This is a
company barely 4 years old and quite nearly a household name in asian
countries.

Additionally when manufacturing electronics, input components decrease in
price so there is a natural tendency for their margins to increase even if
they keep their pricing consistent.

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chvid
A bit funny that this is announced on Facebook given that Facebook is blocked
in China.

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passive
Neat. Their phones always interested me, but I recently got a pair of their
headphones, which are amazing. Not just in the quality of the item itself, but
the fact that they are made on the other side of the earth, and arrive at my
door rather promptly for less than an hours wages. (I know that point itself
isn't unique to Xiaomi, but they are exploiting it to great success)

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pearjuice
So any explanation on what a company with a $45B valuation needs an investment
of $1.1B for?

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repsilat
They make smartphones -- they're a hardware company. The money will probably
help them ramp up production and increase advertising presence.

The valuation implies that they're profitable, but it takes time for
profitability to turn into cash in hand. Raising this money (an action pretty
similar to taking out a loan) will let them strike while the iron is hot.

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justaman
It appears their margins are razor thin.

[http://www.forbes.com/sites/parmyolson/2014/12/15/xiaomi-
pro...](http://www.forbes.com/sites/parmyolson/2014/12/15/xiaomi-profit-
margins-samsung-china/)

