Chinese Tech Company Xiaomi Plans To Sell Its Holding in an Indian Startup

Chinese Tech Company Xiaomi, wants to sell its holdings in Indian businesses and withdraw from the startup ecosystem. The company’s plans may be the outcome of the challenging journey it has taken in the nation thus far.

Xiaomi declared in 2018 that it would invest $1 billion in Indian companies over the following few years. After that, Xiaomi and Shunwei Capital completed a number of acquisitions and built up a substantial portfolio of Indian businesses, including ShareChat, KreditBee, and ZestMoney, among others.

The company noted in its quarterly report released on August 19, 2022, that the continuing investigations in India could take a while to resolve and negatively affect its operating results or cash flows.

Before getting into Xiaomi’s present investment situation, it’s important to know that the company had a good position within India’s IT industry. When the business initially launched mid-priced smartphones in India, it also benefited from the first-mover advantage. The business then made the bold decision to invest heavily in startups, pushing its limits.

The most notable Xiaomi-backed businesses include the conversational media company Bobble AI, the consumer credit company ZestMoney, the social media platform ShareChat, the recruiting firm Work India, the EV mobility platform Oye Rickshaw, and the micro-lending venture KrazyBee. Additionally, the Chinese company was attempting to create an app ecosystem in India by supporting local businesses, utilizing the sizable user base of its smartphones, and ultimately aiming to capture a sizable portion of the expanding market. These efforts were complemented by the launch of Xiaomi’s payment services Mi Pay and Mi Credit in 2019.

According to a senior analyst at a Gurugram-based tech research organization, “The goal was to outdo Google, which held a market share of more than 90% in the Android Play Store and was under fire from OEMs, app developers, and other parties for using in-app purchases and other allegedly unfair business practices. If Xiaomi had done so, it would have had the ideal chance to establish Xiaomi Market in India as a rival app store. The investments and attention of China’s internet giants toward India, however, slowed down as geopolitical tensions between the two countries rose, and Xiaomi appeared to be one of these companies”.