Report: Tencent to Invest $2 Billion in Xiaomi; Xiaomi Confirms Collaboration

Xiaomi CEO Lei Jun

China’s Xiaomi has gone from a little startup with a hip Android ROM to a mobile giant whose latest valuation may have the company worth more than $9 billion. In the midst of what is rumored to be another round of fundraising for Xiaomi, TechWeb is reporting that internet giant Tencent will invest $2 billion in the mobile company, apparently via Russia’s DST.

When contacted for comment about this by TechWeb, Xiaomi representatives denied knowledge of the planned investment and did not confirm it, but they did confirm that the companies are working together on strategic cooperation plans involving core products. At present, those plans are still being discussed.

Whether it has actually made a huge investment or not, Tencent could be a powerful partner for Xiaomi if the Xiaomi can get over the fact that Tencent essentially cloned Xiaomi’s Miliao chat app to make WeChat, which has gone on to become China’s hottest new social platform. Getting your app copied (and subsequently outstripped) by Tencent is almost a rite of passage for Chinese startups at this point, but with Xiaomi now in a much more powerful position, cooperation between the two companies could result in some very impressive products both on mobile and on Xiaomi’s set-top box (to which Tencent could potentially bring videos and games).

We’ll be keeping our ears to the ground to see if this investment news proves to be true, but even if it isn’t, the talk of collaboration between the two companies is quite interesting. Assuming the talks are productive, I’m definitely looking forward to seeing what Xiaomi and Tencent can do when they’re working together.

(via TechWeb)