Xiaomi, which recently entered the list of the global cult of startups, has reportedly bought 3% stake in Kingsoft, one of China’s prominent software and gaming giant. Xiaomi has invested a net sum of $65m to freeze this strategic deal.
Kingsoft started out developing PC games, but today the company — which is listed in Hong Kong and valued at over $2 billion — produces security, entertainment and enterprise products too. It already has strong links to Xiaomi, whose CEO and co-founder Lei Jun is also founder and chairman of Kingsoft.
Xiaomi is showing all intentions to focus deeply on software and services. The company has already invested $200m in Midea–an appliance maker and Misfit, a wearable making firm. However, the Kingsoft deal suggests Xiaomi’s future intentions to milk the gaming market too. Kingsoft is already a globally recognized name in gaming and the deal is likely to give good intel to Xiaomi.
Apart from being one of the top sellers for mobile devices, Xiaomi has a flourishing family of hardware and smart home products — including an air purifier, blood test device, smart TV and streaming box. The company can possibly look to construct a network of services to further monetize its user base in the future.
Hugo Barra — the company’s VP of international admitted that Xiaomi is set for more investment and is likely to invest in a host of companies in India too with a special focus on mobile and e-commerce startups.
The Xiaomi investment in Kingsoft is expected to be completed at the end of January. The company bought its shares from internet giant Tencent, which reduced its stake in Kingsoft to 9.6 percent. Lei Jun himself owns 15 percent of the company.
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