The world's most valuable private technology company backed by venture capital now hails from China.
Smartphone maker Xiaomi's latest round of fundraising values the start-up at $45 billion, surpassing the $41 billion mark reached by car-hailing app Uber at the beginning of the month.
Xiaomi, which sells more smartphones in China than Samsung and Apple, is raising at least $1 billion, according to reports from Bloomberg, the Wall Street Journal and Reuters.
Xiaomi sells phones that rival the quality of iPhones and high-end Android devices, but offers them at prices sometimes half as much. It keeps costs down by conducting sales through the Internet and limiting spending on marketing.
During the third quarter of this year, Xiaomi shipped 17.3 million smartphones, according to IDC. Though far behind the 78 million shipped by Samsung and the 39 million shipped by Apple, the figure represented a 211% jump from the same period last year and pushed 4-year-old Xiaomi into the global No. 3 slot.
Xiaomi's Mi 3 and the Redmi Note were the sixth and eighth bestselling smartphones worldwide in September, according to Counterpoint Research.
Xiaomi is setting its sights beyond Asia and smartphones. It's entering countries such as Brazil and Mexico and recently launched a fitness band and an air purifier. Long-term, the the company plans to drive revenue from selling software and services through its devices.
Venture capitalists buy a percentage of ownership in a company and that figure is multiplied to arrive at a total value. For example if a company's most recent investors give the company $1 billion for 1/45th stake –- as in Xiaomi's case — the total value of the company equals $45 billion. That figure serves as a rough guide to what Xiaomi would be worth if it traded on public stock markets.