Xiaomi, Shunwei to invest $300m in Baidu-controlled iQiyi

The announcement comes after Xiaomi unveiled plans to invest $1 billion in digital content, with online video a particular target. This would expand the company's commercial ecosystem, which currently includes hardware and operating system software. It launched a smart TV last year and wants to create an Apple-like system of synchronized devices.

Last week Xiaomi cemented a partnership with Youku-Tudou, China's largest online video platform. It will buy stock in Youku-Tudou on the open market and the two companies will jointly invest in the production and distribution of content. The stated aim is to accelerate the development of Xiaomi's multi-screen media and entertainment system.

Xiaomi also recently hired Chen Tong, formerly editor-in-chief and executive vice president of Sina.com, as vice president of content investment and operation. He has taken charge of the digital content business.

Launched in April 2010 and originally known as Qiyi, iQiyi delivers fully licensed, high-definition and professionally-produced content. Providence Equity Partners was formerly a minority investor in the business. Youku Tudou, meanwhile, has a strategic partnership with Alibaba Group. The company acquired an 18.5% stake for $1.22 billion earlier this year alongside Yunfeng Capital.

Xiaomi was founded by Lei in 2010 and has a string of VC and PE backers. MIUI, an Android-based user interface came first, but it was Xiaomi's first smart phone, launched in 2011 to a huge reception, that catapulted the firm into the big time. It is now said to be the world's third-largest smart phone producer. Xiaomi has since made numerous strategic investors, either directly or through Xiaomi Ventures.

Lei set up Shunwei with Tuck Lye Koh, formerly of GIC Private and C.V. Starr Investment Advisors, in 2011. A debut fund of $225 million was raised later the same year with commitments from sovereign wealth funds, family offices, fund-of-funds and endowments. Earlier this year, Fund II reached a final close of $525 million after about two months in the market.

Xiaomi and Shunwei have invested together before. In September, they jointly led a $37.2 million Series B round of funding for Jimubox, a peer-to-peer (P2P) lending start-up in China.

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• Topics
• Technology
• Consumer
• Greater China
• Expansion
• Venture
• Baidu
• Xiaomi
• Shunwei Capital Partners
• China
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• Growth capital
• Venture