HONG KONG • Xiaomi Corp, the Chinese smartphone maker that was once the most valuable start-up in the world, is in talks with investment banks about a possible initial public offering (IPO) and seeking a valuation of at least US$50 billion (S$67.3 billion), according to people familiar with the matter.
The Beijing-based company is considering an offering as soon as next year with banks suggesting Hong Kong as the most likely destination, said the people who requested not to be named. A successful IPO may bring it at least US$5 billion - much-needed ammunition for expansion, they added.
"We want to transplant China's business ideas into other countries," Xiaomi founder and chief executive Lei Jun said on Monday at the World Internet Conference in Wuzhen, without commenting on an IPO. "In India, we've created a miracle. After only three years, we've become No. 1."
Xiaomi spokesman Kaylene Hong said the company does not comment on IPO matters.
While it has had its ups and downs, the US$50 billion target may be attainable, depending on business performance and market trends over the next few months.
Said Mr Keith Pogson, global assurance leader for banking and capital markets in Hong Kong at consultant EY: "Without a doubt, the market is hot for tech companies, especially tech companies with China ties."
Founded in 2010, Xiaomi, or Little Rice, made its mark with buzzy online marketing campaigns, eschewing traditional retail stores.
By 2014, its formula of flash sales and savvy social media helped it top Chinese smartphone rankings and amass the valuation that made it briefly the highest in the world, before it was surpassed by Uber Technologies. But Xiaomi stumbled last year, with shipments plunging against fierce local competition.
Mr Lei has revived the company by expanding its product line, geographic reach and sales channels. Xiaomi is making a major push into old-fashioned retail: It plans to build 1,000 Mi Home stores by 2019 - about twice Apple's global store count - targeting 70 billion yuan (S$14.2 billion) of retail sales by 2021.
Mr Lei has bet heavily on overseas expansion, especially in India. He has said Xiaomi would double its investment in the country, spending another US$500 million over the next three to five years.
Xiaomi is focusing on emerging markets. The company has said it also intends to establish a presence in the United States, where it has held off on selling phones in favour of devices such as fitness bands. Xiaomi is now aiming to ship 100 million smartphones next year, reviving a target it had abandoned during its difficult days.
"We've been seeing the rise of Chinese brands," Mr Lei said. "In the next 10 years, the large number of Chinese brands will continue to grow and become international - the trend is quite clear."