March 21, 2016 / 5:13 AM / 2 years ago

China's Xiaomi has no plans to raise new funds for now: VP

HONG KONG (Reuters) - China’s most valuable start-up Xiaomi Inc [XTC.UL] is financially self-sufficient and has no plans to raise new funds for now, its global vice-president said on Monday, even as it is undertaking a planned expansion in India.

Xiaomi vice president Hugo Barra poses with a Redmi Note 3 during an interview with Reuters after a launching ceremony in Hong Kong, China March 21, 2016. REUTERS/Bobby Yip

Xiaomi, the world’s fifth-largest smartphone vendor, also has no immediate plans for an initial public offering, Hugo Barra told Reuters in an interview.

The company has “no need to raise more money and no plans to raise more money. No plans for now. No IPO plans either,” he said.

Xiaomi is expanding its production capacity in India, aiming to build two new factories with Taiwan’s Foxconn this year in addition to one they currently operate to build phones locally. Xiaomi currently produces in India 75 percent of the phones it sells there and aims to raise that to close to 100 percent with the new factories, Barra said.

The company last raised funds from investors in December 2014, tapping private equity funds including All-Stars Investment and DST Global, as well as Singapore sovereign wealth fund GIC Pte Ltd [GIC.UL] for $1.1 billion at a valuation of $45 billion.

The funds have been used to invest in more than 50 startups including video content providers in a bid to increase revenue from Internet services such as games and mobile payment apps that offer higher profit margins than handsets, Barra said.

“All the money we have raised is allocated to investments. From an operations point of view, our business has been self-funded for sometime,” Barra added.

Xiaomi missed its 2015 global shipment target by 12 percent, selling 70 million handsets in a year when local rivals such as Lenovo Group Ltd and top player Huawei Technologies Co Ltd [HWT.UL] countered at home with similar Internet-only sales.

Reporting By Yimou Lee and Elzio Barreto; Editing by Anne Marie Roantree and Muralikumar Anantharaman

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