Xiaomi-backed Ninebot buys US rival Segway that once accused it of IP theft
Chinese company Ninebot, backed by Xiaomi and other venture capital firms, has acquired its US rival Segway, the companies announced this week.
The three-year-old Beijing-based start-up did not disclose the amount of the acquisition, but said that it received US$80 million in funding from sources including Sequoia Capital and Xiaomi boss Lei Jun's personal private equity fund Shunwei.
Ninebot makes two-wheeled electric vehicles, designed for standing riders, that resemble Segways.
The acquisition comes about half a year after Segway named Ninebot in a patent infringement complaint in September 2014 and sought an import ban against the company in the US.
Gao Lufeng, Ninebot's chief executive, did not address the dispute on Wednesday but told reporters the combined company would hold a significant lead in market share as well as a vast portfolio of over 400 critical patents.
Sequoia Capital China partner Neil Shen said Ninebot generated more sales last year than Segway had since its launch, signifying the buyout was not chiefly aimed at absorbing Segway's revenue.
"With the two brands together we will have a lot of resources," Gao told reporters at an event in Beijng, adding that the companies would operate as separate brands.
The combined company will focus on research and development, manufacturing, sales and service in the short-distance transportation industry, with the goal of promoting the rapid development of that industry and leading the revolution of mobile robotics solutions.
"This strategic combination ... creates a development opportunity for the short-distance transportation industry, which the combined company will lead by widely applying a series of technologies, such as electric driving, mobile internet and human-computer interaction, on future products," said Gao.
"We are confident that this combination will help promote the development of short-distance transportation as well as the growth in the mobile robotics platform industry. As a result of these two well-known brands joining forces, we will be able to provide more convenient and greener solutions."
Bedford, New Hampshire-based Segway had once hoped to revolutionise personal transportation when in 2001 inventor Dean Kamen unveiled with much fanfare a scooter that could be driven by shifting one's weight and turned it into a pop culture icon. But the company struggled to become profitable and became widely seen as a sales failure despite some law enforcement and industrial uses.
“Intelligent hardware has grown quickly worldwide during the past several years. Our combination with Ninebot will enable us to provide more intelligent and valuable products to our customers. We are confident in our future” said Rod Keller, president of Segway, in a statement.
Xiaomi has made a number of recent investments with the aim of building an ecosystem of internet-connected devices and appliances to extend its reach beyond smartphones.
"Xiaomi's strategy is to push development in smart hardware and in the Internet of Things, and then connect them with the smartphone," Lei said.