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John Wang
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Finance
May 22 19:58

Xiaomi has backed 300 companies with over 30 billion yuan

Company continues its push into IoT.
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Chinese budget smartphones giant Xiaomi stated that it has provided backing for over 300 companies by March. The investments totaled at 32.3 billion yuan, the net gains came at 225.9 million.
The company is pursuing a large-scale strategy, aimed at creating its own internet of things ecosystem. Some companies, however, remain indecisive about joining the effort. The partnership with Xiaomi provides a great reach to the millions of users worldwide - in exchange the companies might lose profits in the long run and become too dependent on the larger brand.
7 years ago Lei Jun - the founder of Xiaomi - committed to backing around 100 of hardware manufacturers in the next five years. The plan was to amass a large number if users via the cheap devices. This network can then be used to promote new services and products. In order to achieve the goal. Xiaomi had to keep its margins low, even if it means slower growth. 
The idea did not come to fruition as fast as expected. In Q1 of 2020 the company’s services accounted for only 12% of Xiaomi’s profits, even though the sector grew three times year-on-year.
This forced Xiaomi to pivot to tech retail. The IoT infrastructure is supposed to boost the effort.