Xiaomi Is Said to Seek at Least $50 Billion Valuation in IPO

Xiaomi Corp., the Chinese smartphone maker that was once the most valuable startup in the world, is in talks with investment banks about a possible initial public offering and seeking a valuation of at least $50 billion, according to people familiar with the matter.

The Beijing-based company is considering an offering as soon as next year with banks suggesting Hong Kong as the most likely destination, said the people, requesting not to be named because the matter is private. While banks have talked up Xiaomi‘s prospects as they seek to win the mandate, they have concerns about whether the company can reach the $50 billion level, much less a $100 billion target that some top executives have embraced, the people said. Xiaomi last raised money in 2014 at a $46 billion valuation.

Xiaomi has gained momentum in recent months after stumbling against local rivals such as Huawei Technologies Co. and Oppo. The company, led by Lei Jun, has invested aggressively in retail stores and in India. It‘s now on the verge of surpassing Samsung Electronics Co. in the country, the world‘s fastest-growing smartphone market. A successful IPO may bring it at least $5 billion, much-needed ammunition for expansion, the people said.