171: Chapter 171 Rice Financing Meeting

Just as Shen Fei was preparing to "sell technology," at the Yingu Building in Beijing, the Xiaomi Series A financing meeting was officially convened.

A dozen or so people were seated in the conference room, including Liu Ting from Morningside Capital, Zhou Quan from IDJ, Qi Ziping from Qiming Venture Partners, and several foreign faces.

The successful cases of Huawei and Transsion made them bullish on the Chinese mobile phone market, making it a true hotspot.

The premium was very high...

Lei Jun sat at the head of the table, with co-founders Lin Bin and Li Wanqiang beside him.

Before the financing meeting began, Liu Ting was the first to offer congratulations: "Mr. Lei, the sales of the first-generation Xiaomi have now exceeded 1 million units. Congratulations!"

"Many thanks. The current shipment volume is 430,000 units for the first-generation Xiaomi and 1.28 million units for the Youth Edition.

This sales figure is mainly due to tight production capacity, not because we lack customers."

Liu Ting and the other investors showed cautious expressions; was their data research wrong?

It had risen so much; it seemed they would have to raise their estimates!

"Half a year, nearly 2 million in sales. For a startup company, this data is quite fast."

Lei Jun shook his head: "Not fast. transsion s2 sold over a million units in just one month."

"Honor, at the same price point, is still stable at several hundred thousand units.

So our actual sales period was only about a month; this result is far from the upper limit."

"Mr. Lei is correct. It's mainly because Qualcomm held us back; otherwise, counting just the standard edition sales, we would have already exceeded 3 million," added Lin Bin.

Zhou Quan from IDJ was no fool and immediately poured cold water on them: "Mr. Lin, Mr. Lei, that's not how you should put it.

Transsion has factories and channels, so high sales are natural.

The most important thing is that they have self-developed technology, and the market buys that.

If Xiaomi really launches in May, with honor play in the lead, whether sales can take off is also a question.

However, the first-generation sales are not bad. Selling over 2 million units in half a year, with another 2 million in orders, is already quite remarkable."

Lei Jun didn't respond...

Qi Ziping asked: "Mr. Lei, what is the next step for Xiaomi? This will affect the valuation we provide."

Lei Jun stood up, adjusted his clothes, and announced that the financing meeting was officially underway.

He walked to the whiteboard: "Regarding Xiaomi's future path, I have a very detailed plan in mind.

First, Xiaomi will continue shipping; the supply chain on Qualcomm's side is nearly stable, and we can sell at least another 5 million units in the second half of the year."

He wrote on the whiteboard: 5 million units.

"Second step: Xiaomi 1S, launching at the end of the year, upgrading the imaging system, adding a front-facing camera, with the price still at 1999."

He wrote down some of the Xiaomi's specifications: the basic hardware remains unchanged, slightly modify the appearance, then add a front camera, with a target of 4 million units.

"Next year's task is the Xiaomi 2. This phone will absolutely not be dragged down by supply volume issues; we will strive to sell over 10 million units."

"Long-term goal: within three years, Xiaomi's average annual shipment volume will reach 60 million units."

After Lei Jun set the goal, the investment bank representatives in the conference room applauded with admiration.

"Mr. Lei, 60 million units in three years is a very large number," Liu Ting applauded again.

"Whether it can be successfully achieved is still a question.

Looking at it now, both of Huawei's phones are a bit struggling, and Xiaomi..." Zhou Quan shook his head while holding the business plan.

"I'm also a bit skeptical; if it were set at 30 million, it would feel more appropriate," said Qi Ziping.

Although all parties were not particularly optimistic, none of them wanted to withdraw.

The other mobile phone manufacturers—one was not short of money, and one had already sold 50%; as for other brands, they all had more or less issues and were not worth investing in.

[Huang Zhang: Smearing me again...]

"I know everyone is a bit hesitant about this plan, but do you know how big the Chinese mobile phone market is?"

Everyone turned their eyes toward Lei Jun.

"This market is bigger than you can imagine.

Last year, Chinese mobile phone sales were 280 million units. This year, it is expected to exceed 300 million units."

"60 million is only 18% of the market, less than 1/5; this goal is not large.

Take our friendly competitor Transsion, for example; they can sell 40 million units this year, and this is just their first year back in the country."

He stepped forward: "Xiaomi's goal is not to grab the number one spot, but to gain a firm foothold.

18% market share is enough for us to thrive.

With this goal, and then expanding into other markets, our annual sales volume within 5 years can definitely exceed 100 million."

A big "1" was written on the screen, followed by a string of zeros.

Zhou Quan asked again: "The goal is great, but what is Xiaomi's moat? Hardware can be copied, systems can be imitated; what do you rely on to keep users?"

"You've hit the nail on the head," Lei Jun answered with a smile.

"MIUI and Mi Fans are Xiaomi's greatest assets right now."

He looked at them: "MIUI users have already exceeded 3.5 million.

These 3.5 million are not ordinary users; they are enthusiasts.

They flash their phones every week, provide suggestions every day, and test every version."

He thought for a moment: "These people buy Xiaomi phones not because they are cheap, but because they are phones created for the consumers.

We listen carefully to their suggestions; these people have been completely won over.

There's even a joke online—this is our Mi Army."

Zhou Quan and the others nodded.

This sounded like a joke, but the reality was indeed the case; the activity level of Mi Fans was indeed higher than any other company.

"As long as we release new products, these people will help us promote them for free, help us improve, and help us bash our competitors.

They are Xiaomi's moat."

He sat back in his seat with a confident expression on his face: "Everyone, you are not investing in Xiaomi phones, but in the MIUI community.

Phones can be changed and systems can be remade, but these millions of users are bound to Xiaomi."

After speaking, Lei Jun sat there confidently, letting them think it over properly.

"Mr. Lei, is this number really that high? Does this include those copycat phones..."

"This..."

"Currently, we have already regulated those copycat phones; they cannot directly flash MIUI, and now they have switched to other customized systems.

These 3.5 million are all true Mi Fans."

Of course, what Hong Feng didn't say was that although manufacturers couldn't flash it, Mi Fans could.

The negotiation lasted over three hours.

In the end, all parties reached an agreement: Xiaomi Company was valued at 750 million USD, and this round divested 10% of shares to raise 75 million USD.

Liu Ting, Qi Ziping, and Zhou Quan led the way, each taking 2.5% of the shares, with the remaining 2.5% split among several foreign firms.

After signing, Liu Ting looked at Lei Jun: "Mr. Lei, I have a question."

Lei Jun looked at her: "Go ahead."

"You just said that Xiaomi wants to reach a sales volume of 60 million units within three years. What if you can't do it?"