Aug. 23 (Bloomberg) -- Xiaomi Corp., the three-year-old smartphone maker that overtook Apple Inc.’s iPhone in China, has a valuation of $10 billion after completing its latest round of funding, according to a board member.
Hans Tung, a director of Xiaomi, confirmed the valuation in an e-mail today, declining to provide further details of the fundraising. Founder and CEO Lei Jun confirmed the estimate for the closely held company earlier today on his verified account on Sina Corp.’s Weibo microblog.
Xiaomi said it had a valuation of $4 billion in June 2012 after raising $216 million, bolstering a company backed by Temasek Holdings Pte and Tung’s Qiming Venture Partners. Since then it has announced plans to more than double handset sales to 15 million this year, struck a deal to supply devices to China Mobile Ltd and risen to sixth in the nation’s smartphone market, one place ahead of Apple.
“It’s surprising to see such a small company reach such a high valuation of $10 billion,” Nicole Peng, the Shanghai-based China research director for Canalys, said in a phone interview today. Xiaomi has the potential to grow and challenge companies including Lenovo Group Ltd. and Huawei Technologies Co., she said.
A $10 billion valuation on Xiaomi compares with a market value of $10 billion for Lenovo, the world’s biggest maker of personal computers, and about $20 billion for Sony Corp.
Xiaomi has won sales with cheaper handsets as it builds its brand. Apple sells the iPhone 5 on its China website from 5,288 yuan ($864). Xiaomi’s most expensive handset is 1,699 yuan.
The company rose to sixth in the June quarter from eighth a year earlier, Canalys said Aug. 9.
Raine Zhang, a Beijing-based spokeswoman for Xiaomi, declined to comment on the valuation. She verified Lei’s Weibo account.
Starting this month, Xiaomi began sales of its first device for China Mobile, the world’s largest phone company with 745 million subscribers at the end of July. The handset will be priced at 799 yuan.
To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Tighe at email@example.com