Chinese smartphone giant, Xiaomi has acquired Deepmotion, an autonomous driving startup, for about $77.37 million. The company believes the acquisition will enhance the technological competitiveness of its electric vehicle business.
Xiaomi had announced plans in March to launch an electric vehicle business and invest $10 billion over the next 10 years. The acquisition, according to CNBC, could help bring autonomous driving features to the cars Xiaomi eventually produces, a feature being developed by many automakers for next-generation electric vehicles.
The company announced the Deepmotion acquisition after recording financial results for the second quarter which saw a revenue surge of 64% year-on-year to $13.5 billion. Xiaomi’s total revenue and adjusted net profit hit record highs in the quarter. Moreover, its smartphones accounted for 67.3% of total revenue. However, the company is looking at reducing its reliance on mobile phones by pushing into other internet-connected devices. It hopes EVs can be a new revenue stream.
Deepmotion develops driver assistance software and is the latest step by Xiaomi to broaden its horizons by stepping into the EV industry. And with this, the brand is now shoulder-to-shoulder with the likes of Huawei and Baidu, as they are also developing their own autonomous driving technology as well.
Lei Jun, Founder and CEO, Xiaomi is leading the company’s electric vehicle project. The company also intends to invest heavily into the EV market through its own research and development and manufacturing to produce its first self-branded electric car. The acquisition of Deepmotion will help it get further with this. Wang Xiang, President, Xiaomi, said through this acquisition, the company hopes to shorten the time to market for the product. “We want to speed up our autonomous driving R&D.”
Xiaomi conditionally agreed to acquire and each common shareholder sell and each preference shareholder seller conditionally agreed to sell 125 million common shares and 50,854,700 preferred shares. Upon completion of the agreement, Deepmotion will become a wholly-owned subsidiary of Xiaomi Group. Reports highlight that Deepmotion may integrate a team of more than 20 people into Xiaomi to help it initially increase its technical accumulation in the field of autonomous driving.