Xiaomi Puts a Windfall to Work Beyond Phones

In China, Xiaomi smartphones outsold Apple and Samsung within three years of the first model’s 2011 release. Last year, Xiaomi’s sales more than tripled, to 61.1 million smartphones, making it the world’s No. 3 phone manufacturer in the third quarter. Now valued at $45 billion, the private company is flush with cash and is spending big in an effort to expand into other devices.

Xiaomi announced in December that it had raised $1.1 billion from investors, including Russian Web pioneer Yuri Milner. Since November the company has also participated in more than $600 million worth of investments in cloud services, online video, and health-tracking accessories companies, and announced undisclosed stakes in more than two dozen startups. “Investing in startups will allow us to build other types of hardware without doing all of the design and development,” says Xiaomi President Bin Lin. Founder and Chief Executive Officer Lei Jun has also committed to spending $1 billion on digital entertainment for Xiaomi’s devices, including its phones, Web-connected TVs, and video-streaming Mi Boxes.