Mark Zuckerberg reportedly met with Xiaomi Inc CEO Lei Jun to discuss a possible investment by Facebook into the Chinese company ahead of its $1.1 billion funding round in December.
The talks were held at a private dinner when the Facebook chief visited Beijing in October 2014. However, sources familiar with the matter revealed that the discussions were never formalised.
During the discussions, the two CEOs reportedly weighed up the commercial and political implications of Facebook, which has been banned in China since 2009, buying into the Chinese phone maker. Xiaomi is now valued at $45 billion and referred to as “the Apple of China”.
“Facebook wants to get into China, and Xiaomi is keen to expand outside, so they both recognise the importance of working together,” said one of the sources.
Despite only having made its first smartphone in 2011, Xiaomi witnessed significant growth in China and is now the third biggest smartphone maker in the world.
CEO Lei said: “Within five or 10 years, we have the opportunity to become the number one smartphone company in the world,” beating both Samsung and Apple.
Although Facebook’s investment would raise Xiaomi’s international profile, one insider at Xiaomi downplayed the investment, saying it was “not huge.” Nonetheless, the discussions underscore how much closer Chinese and America firms have become as China’s technology industry matures.
Two of the sources revealed that Lei was put off selling a stake to Facebook by the possibility of political fallout in China.
Lei is also concerned that a partnership with Facebook could jeopardise the company’s relationship with crucial business partner Google, who supports the phone maker’s hardware with its Android mobile operating system.