Rise of Xiaomi: the Chinese start-up poised to become world’s biggest IPO of 2018
Stock exchange officials from New York, Hong Kong, Shanghai and Singapore are trying to pitch their bourses on what would probably be the largest global initial public offering in four years
Lei Jun is a busy man. On a recent Saturday, his first full day in Xiaomi’s Beijing headquarters in three weeks, the founder of the world’s fourth-largest smartphone maker had scheduled 11 back-to-back meetings with board members, government officials, colleagues and customers.
A successful offer, expected in the summer, could make Lei China’s wealthiest man a few months before he turns 49 in December.
Xiaomi’s billionaire founder reveals his formula for success
“I started Xiaomi after turning 40, and had figured out 90 per cent of the business model before starting the project,” Lei said. “We created this business model that we call “tipping”, which is to sell our hardware at zero or low profit margin, but monetise our complementary services.”
I call it the triathlete of the New Economy, where Xiaomi makes hardware and devices, sells its products through e-commerce and offers services on the internet
Xiaomi’s valuation has more than doubled from its most recent 2014 fundraising when it was valued at US$45 billion, according to a person familiar with the guidance in the company’s IPO plan, requesting anonymity to discuss a confidential matter.
With Lei’s stake in Xiaomi estimated at 77.8 per cent by the financial news site Yicai Global, that valuation would make him China’s wealthiest man, surpassing the US$45.3 billion fortune of Tencent’s founder Pony Ma Huateng, and the estimated US$39 billion wealth of Alibaba Group Holdings’ founder Jack Ma Yun.
“I call it the triathlete of the New Economy, where Xiaomi makes hardware and devices, sells its products through e-commerce and offers services on the internet,” Lei said.