Facebook founder Mark Zuckerberg and Xiaomi CEO Lei Jun had discussed a potential partnership for Facebook to invest in the smartphone maker way back in October according to Reuters.
Two of the bigwigs had a private dinner when Mark was in Beijing in October, as they weighed the political and commercial impact it could have in China, since Facebook is banned in the country from 2009 along with Google and Twitter.
This information brings to light that though the Facebook investment was “not huge”, the talks underscore how ties between US and Chinese companies have deepened as China’s tech industry matures.
A Facebook investment in Xiaomi would have raised the international profile of the popular handset maker dubbed “China’s Apple” by its fans and linked it to a US social networking phenomenon with more than 1.3 billion users.
Facebook for a long time has thought of entering the world’s most populous country and the tie-up with Xiaomi would have given it some chance. Xiaomi too has been mulling about the smartphone’s debut in US market and Facebook would have been the perfect partner for it.
Xiaomi’s Lei was partly put off by the potential for political fallout at home of selling a stake to Facebook while the US social network is still banned in China, two of the people said, adding Xiaomi also feared a tie-up with Facebook could threaten its relationship with Google, a crucial business partner.
Xiaomi ultimately announced last month that it raised $1.1 billion from investors including Hong Kong-based tech fund All Stars Investment; DST Global, a private equity firm that has invested in Facebook and Alibaba Group; Singapore sovereign wealth fund GIC; Chinese fund Hopu Management; and Alibaba founder Jack Ma’s Yunfeng Capital.
The fundraising valued Beijing-based Xiaomi at $45 billion just three years after it sold its first smartphone. The company had revenue of close to $12 billion in 2014.
A strategic partnership with Xiaomi would give Facebook another avenue to distribute its apps and potentially provide a powerful ally in its bid to overturn its China ban.
For Xiaomi, access to Facebook’s vast banks of user data would be valuable as it seeks to grow into a global internet company providing comprehensive online services.
But Lei thought it would be “too sensitive” to sell an equity stake to Facebook given its uncertain political status in China reports Reuters.
Xiaomi in an event today launched four products, two of which are phones which could give competition to Apple’s iPhones and continue Xiaomi’s dominance in the Asian emerging markets. Xiaomi launched Mi Note and Mi Note Pro, both of which are 5.7 inch phones filled with specs that could kill flagship phones from other manufacturers.