The hottest initial public offering (IPO) of 2015 could likely come from a company you haven't yet heard of...
Xiaomi Corp. is a Chinese tech company founded in 2010. By the end of this year, talk of a Xiaomi IPO will reach a fever pitch. The company has made incredible progress in its brief existence.
Xiaomi launched its first smartphone in 2011. By the third quarter of 2014, Xiaomi became the third-largest smartphone vendor in the world. It beat out such veterans as LG Electronics Inc. and Lenovo Group Ltd. (OTCMKTS ADR: LNVGY).
The company's astonishing growth is why so many expect a Xiaomi Corp. IPO within the year.
Xiaomi Chief Executive Officer Lei Jun announced last weekend that 2014 revenue had more than doubled from the previous year, from $5.2 billion to $11.97 billion. That was up some 150% from 2012 revenue of $2 billion.
Phone sales have soared from 7.19 million units in 2012 to just over 61 million in 2014. Xiaomi expects to sell 100 million smartphones this year. To put that into context, Apple Inc. (Nasdaq: AAPL) sold 169.22 million iPhones in its 2014 fiscal year.
That's why venture capitalists are investing in Xiaomi with abandon...
Venture Capitalists Investing in Xiaomi Corp.
The company raised more than $1 billion last month in its latest round of funding. Xiaomi Corp. is now valued at $45 billion. That puts it ahead of Uber Technologies Inc. ($41 billion) and Airbnb Inc. ($10 billion).
Russian billionaire Yuri Milner, who invested in Facebook Inc. (Nasdaq: FB) back in 2009, thinks Xiaomi's valuation could hit $100 billion. Milner's DST Global has been investing in Xiaomi since 2012.
"I was attracted by the size of the opportunity ahead of them," Milner told Bloomberg last month. "I don't think there's any company that has reached $1 billion in revenue as fast as Xiaomi. In every conceivable benchmark, it's almost unprecedented in terms of its speed of growth."
While it has made no formal IPO announcement, the South China Morning Post reported in November that the company is studying its options. And the success of the Alibaba Group Holding Ltd. (NYSE: BABA) IPO last September could not have escaped the notice of Xiaomi brass.
Given the company's crazy growth and the rising investor interest in Chinese companies, a Xiaomi IPO is a sure thing.
As with Alibaba, a Xiaomi IPO would offer a great opportunity for investors. The impressive numbers only tell half the Xiaomi story.
About the Author
David Zeiler, Associate Editor for Money Morning at Money Map Press, has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.