Friday, November 28, 2014

Outbrain Files for Possible Nasdaq Listing

Source: Wall Street Journal, By Orr Hirschauge

Outbrain Inc., a provider of “native ads,” filed confidentially with the U.S. Securities and Exchange Commission earlier this month seeking preliminary approval to list shares on the Nasdaq Stock Market, according to people familiar with the matter.

If a decision is made to go ahead, Outbrain is expected to seek a valuation of around $1 billion, according to one person familiar with the matter. It is unclear how much of the company it would seek to sell in any listing.

Outbrain has tapped Goldman Sachs and J.P. Morgan as lead underwriters for any listing, these people said. If the filing passes SEC scrutiny, the company is aiming to go public in the first quarter of 2015, according to these people.

Founded in Israel in 2006, Outbrain was a pioneer in native advertising, or ads that are meant to be more integrated into a website than other forms of ads, like pop-ups and banner ads. It is now based in New York.

Outbrain places content, like recommended further reading, on a website, linking to the publisher’s own content or sponsored content.

Currently employing around 430 people, the company has raised roughly $100 million in the past from a list of investors including Lightspeed Venture Partners, Carmel Ventures, Glenrock Israel, Gemini Israel Funds Ltd., Index Ventures, Vintage Partners and HarbourVest Partners LLC. 

Outbrain’s biggest competitor in the content recommendation domain is Taboola Inc., itself a New-York based Israeli company.

The Wall Street Journal previously reported the company is now seeking to raise $75 million to $100 million from investors in a U.S. roadshow, after hiring Credit Suisse Group .

In August, Taboola disclosed an annual revenue run rate—a metric that estimates future performance based on most recent results—of $250 million.

Israel’s Bennett to Lobby for Resources to Boost China Exports

Israeli Economy Minister Naftali Bennett said he’ll seek a deeper commitment from the government in order to take exports to China to “a whole new level.”

Bennett said yesterday he plans to move some commercial attaches to China from other nations, and will seek greater investment in developing the trade, including increased credit for Israeli companies. He’ll also press for more ministerial visits. “We have to make a bigger and deeper commitment,”

Bennett, 42, said by phone from China where he was leading a delegation of 15 Israeli water-technology companies. “The potential is immense. We can do more and we will do more.” Israel is seeking to boost sales to economies such as China and India, which are growing faster than its traditional trading partners, the U.S. and Europe.

Exports account for about 30 percent of Israel’s gross domestic product. During the first 10 months of the year, the export of goods to China totaled $2.4 billion, a 6-percent increase from 2013, according to Central Bureau of Statistics figures published this month. Total goods exports rose by about 3.8 percent in the same period.

“China clearly has the biggest market potential in terms of growth in the world, and we want to diversify,” said Bennett, who was a successful technology entrepreneur before he went into politics. “There is a lot of added value that we can specifically give China, that exists to a lesser degree in other places.” Industries with the greatest potential include water technology, including water production and conservation, agriculture and medical devices, Bennett said.

Israeli agricultural technology can help Chinese farmers in areas that lack land or water, he said. While China presents some special hurdles to Israeli exporters, such as intellectual property issues and cultural differences, it views Israel “in a very positive light,” Bennett said.

Tuesday, November 25, 2014

Fosun Pharma seeks strategic Israeli partner

Representatives of the Hermed Fund, Chinese company Fosun Pharma's venture capital fund, are searching for a strategic partner in Israel, and are also considering investments in Israeli companies. Fosun Pharma is part of giant company Fosun, which is worth $8 billion.

Fosun Pharma has been active in Israel since acquiring Alma Lasers for $240 million, and has already made investments in medical devices company Check-Cap, and Tyto Care, which makes possible remote family medicine, but these two investments were made directly by Fosun Pharma, whose venture capital fund is now looking for investments and partnerships in Israel.

The fund is not considering beginning its own activity in Israel; it is considering a connection with a local fund or a non-fund investment entity, which will act as its representative and partner in Israel. It is also considering investments in specific pharmaceutical companies at an earlier stage than the direct investments made by Fosun Pharma, and investments more distant from Fosun Pharma's core business, but which could fit in with it in the future.

In a "Globes" interview six months ago, Fosun Pharma CEO Yao Fang stated that his company would make acquisitions in Israel, adding, "Maybe one day the company will only be Alma, and it will concentrate all of Fosun Pharmaceuticals' medical devices activity from Israel. Fosun Pharma currently emphasizes generic drugs, biosimilars, diagnosis, and health services.

Daniel Cohen is responsible for conducting its technology search in Israel and other countries.

Israeli Minister of Economy Bennett Launches Israeli ‘Water City’ in China

Israel's Minister of Economy Naftali Bennett launched the flagship “Water City” project in China on Monday, announcing that the city of Shougang in the Shandong province would be the focus of Israel’s water-related activities in the country.

The announcement was made in the presence of Chinese municipal officials during Minister Bennett’s current visit to China. The minister landed in China on Sunday to head a business delegation with representatives of 15 Israeli companies seeking opportunities for Israeli water technologies.

The minister’s visit is the high point of an ongoing process led by the Israeli Ministry of Economy through its trade attachés in China. The attachés are working with Chinese authorities to advance Israeli companies and incorporate Israeli technology in the country’s massive water system. The Chinese water system faces many challenges including rapid population growth and widespread contamination of the country’s water resources. Beijing is therefore “thirsty” for Israeli solutions. 

Israeli water technologies will be implemented in the “Water City” project in Shougang for commercial use, which will showcase solutions offered by Israeli companies in real-world conditions in an effort to persuade Chinese authorities to adopt these solutions in other Chinese cities. The city of Shougang was chosen following a stringent selection process by representatives of the Israeli Ministry of Economy and their Chinese counterparts. As part of the project, the city will enjoy technologies offered by Israeli firms in the fields of desalination, sewage management, irrigation, reuse of water for agricultural, water supply and more. This is a first-of-its-kind enterprise supported by the joint Israel-China Mission entrusted with advancing bilateral economic ties.

“Israel and China are natural partners for technological and business cooperation,” said Minister Bennett during the inauguration of Shougang as ‘Water City.’ “We have extensive experience in management of water resources and the ‘Water City’ project will help open the Chinese market to Israeli water companies, as well as advancing bilateral relations.”

The minister’s tour will continue until Thursday, during which the delegation will visit Beijing, Shanghai and Nanjing. In Nanjing, seminars and business meetings will take place between representatives of the Israeli companies and a wide range of government and non-government representatives in the country’s water-management sector.

Minister Bennett will hold further meetings with senior Chinese government officials from the Ministry of Commerce in the People’s Republic of China (MOFCOM), as well as senior executives from the Chinese business sector, including Robin Li, CEO of Internet trade giant Baidu, and with the Chairman of trade giant Suning, with an eye towards helping Israeli companies forge partnerships with these companies and towards bringing the Chinese concerns to Israel to open investment arms and R&D centers. The minister is also expected to launch the China-Israel Business Center in Shanghai and, at the end of his visit, to inaugurate the Israeli exhibition farm in the south China province of Fujian. This agricultural demonstration center is a commercial farm established and supported by the Israeli Ministry of Economy, housing several Israeli companies which showcase their expertise and knowhow in the hopes of drawing clients from China and across Asia.

According to the Foreign Trade Administration at the Israeli Ministry of Economy, Israel’s trade with China stood at $10.8 billion in 2013. Trade with China is expected to rise by 15% in 2014.

Israel water trade

Sunday, November 23, 2014

Israeli IoT Startup Atomation Raised $900k

atomationIsraeli startup Atomation announced that it raised $900,000 in a round led by the Explore incubator, Israel’s chief scientist and other private investors. The company is developing a platform to turn any top into a ‘smart’ toy that is able to connect and communicate with other toys and with a smartphone application. Atomation was founded by Guy Weizman and hopes to bring toys into the Internet of Things revolution.

Thursday, November 20, 2014

Ping An to Invest in eToro, Israeli Online Trading Platform

Source: Wall Street Jurnal, By Orr Hirschauge

Chinese financial powerhouse Ping An and Russia’s largest lender Sberbank are in advanced discussions to back Israeli online trading company eToro, according to people familiar with the matter, as Chinese interest in Israel’s technology sector heats up.

The company is expected to raise about $15 million from Ping An Insurance Group, Sberbank’s financial technology fund SBT Venture Capital and existing investors, the people said.

The final amount of the investment has yet to be finalized, they said. As part of the move eToro is also expected to expand operations into China and Russia by providing its online trading platform through Ping An and Sberbank, the sources said.

eToro has previously raised about $31.5 million from various investors, including Spark Capital and BRM Capital. The deal would come as Chinese investors pour millions in Israel-focused technology investment funds and large financial institutions increasingly turn to startups for fresh ideas.

Ping An Ventures, the venture investment arm of China’s largest financial conglomerates, last November launched a $100 million fund dedicated to investing in U.S.-Israel technology companies. Yongjin Group a Chinese equity-investment management and financial-services company, has put between $15 million and $20 million into Israeli venture fund Pitango Venture Capital during the past year, according to The Wall Street Journal.

Chinese computer maker Lenovo invested about $10 million in venture fund Canaan Partners Israel, in August. Daniel Tu, chief innovation officer of the Ping An Group, recently visited Israel for a second time.

While he didn’t comment directly on the company’s intention to invest in eToro, he did speak about Ping-An’s general aims. Mr. Tu said: “Ping An is an integrated financial group and we embarked on an online strategy. We are always looking into fintech startups and companies like eToro make for an interesting target for us. They can help us and our clients.”

eToro, which was founded in 2007, enables retail traders to invest and share information about their trades, performance and strategies online. Much as on Twitter , social traders can “follow” each other and are updated on trades through a live feed or messages. They can also sign up to a service that will automatically copy trades of a top performer.

The company, which competes with firms such as ZuluTrade and Ayondo, aims to ultimately bridge the information gap between retail and institutional traders. It has four million users in 170 countries, according to information presented by the company this month. Ping An and Sberbank are one of several large financial institutions that have recently launched venture arms to invest in technology companies as they seek to keep up with the rapid pace of digital innovation. Sberbank launched its $100 million fund late last year to invest in young fintech firms, while U.K. bank HSBC this year allocated up to $200 million to invest in fintech firms. Shortly after Santander announced the launch of a $100 million fintech fund.

Wednesday, November 19, 2014

Temasek of Singapore to Invest in Tel Aviv University Technology Innovation Momentum Fund

Ramot at Tel Aviv University Ltd. (Ramot), the University's tech transfer company, and Temasek, a Singapore-based investment company, have entered into a strategic agreement to fund and generate leading edge 'commercialization ready' technologies in a wide range of fields, including engineering and exact sciences, environment and clean technology, pharmaceuticals and health care.

With a $5 million commitment from Temasek, as the second lead investor, together with Tata, the Momentum Fund is announcing its closing with an over subscribed level of investment of $23.5 million.

The Momentum Fund invests in promising breakthrough technologies. Multiple committees, comprising global domain experts, Tata and Temasek representatives, will select technologies with significant commercial potential. Such technologies will be further developed under the supervision of dedicated program managers to be brought to an advanced state where Ramot, TAU's technology transfer company, will drive the process to translate such innovations into attractive licensing opportunities for the industry.

Commenting on the development, the TAU President Prof. Joseph Klafter said, "We are extremely proud that Temasek, a world leading investment company, following Tata, has selected TAU as a partner. Our innovative initiative and inter-disciplinary research set an example for others to follow. With support from both Tata and Temasek, TAU aims to develop groundbreaking advanced technologies that have the potential to positively impact communities across the world in many technological areas."

Mr. Shlomo Nimrodi, Ramot's CEO, said: "Being the second lead investor, Temasek will be able to see promising technologies at Tel Aviv University, as well as participate in the different Scientific Committees and in the Investment Committee." Shlomo added, "I am extremely pleased and proud that the Ramot and TAU teams were able to exceed the initial goal we set for ourselves of $20 million. This is a testament to the strength of our institution as well as the ability of our team to plan and execute.

The Momentum Fund already selected six leading technologies in Q1 2014 and is in the process of selecting an additional 4-6 technologies in Q4 2014. We expect the Momentum Fund to support 20-40 promising innovations over time."

About Temasek:

Incorporated in 1974, Temasek is an investment company based in Singapore, with a S$223 billion (US$177 billion) portfolio as at 31 March 2014.

Temasek's portfolio covers a broad spectrum of sectors: financial services; transportation, logistics and industrials; telecommunications, media & technology; life sciences, consumer & real estate; energy & resources. Its investment themes reflect Temasek's perspectives on the long term trends:

  • Transforming Economies; 
  • Growing Middle Income Populations; 
  • Deepening Comparative Advantages; 
  • Emerging Champions. 
Temasek's compounded annualized Total Shareholder Return since inception in 1974 is 16% in Singapore dollar terms, or 18% in U.S. dollar terms.

The company has had a corporate credit rating of AAA/Aaa since its inaugural credit rating in 2004, by rating agencies Standard & Poor's and Moody's respectively.

Temasek has offices in 11 cities around the world, including São Paulo and Mexico City in Latin America, and London and New York, which both opened in 2014. The remaining offices are all in Asia, including China and India.

About Ramot at Tel Aviv University Ltd:

Ramot is Tel Aviv University's technology transfer company and its liaison to industry, bringing promising scientific innovations made at the university to commercialize with industry. The company provides the legal and commercial frameworks for inventions made by TAU faculty, students and researchers, protecting discoveries and innovations with patents and working jointly with industry to bring scientific innovations to the market.

Monday, November 17, 2014

Qihoo 360 Plans $60 Million Israeli IoT Fund

Source: Wall Street Jurnal, By Orr Hirschauge

Chinese Internet-security company Qihoo 360 Technology Co. plans to establish a global, early-stage fund with a $60 million target size for investments in Internet-of-Things companies, according to a presentation shown last week by a company representative during a visit in Israel.

The intended fund, called 360 Capital—IoT Fund will focus on investments in China, the U.S. and Israel, the presentation says. Qihoo, which listed American depository receipts on the New York Stock Exchange in 2011, develops and distributes free personal-computer and mobile-security software, deriving revenue from advertising.

The company also has a Web browser and a mobile-application store. With around 7,000 employees, its current market capitalization is more than $9 billion. Qihoo didn't respond to a request for comment.

Qihoo intends to be the leading limited partner in the fund, with other limited partners including both strategic investors and financial institutions, the presentation says. While the fund will be focused on early-stage investments it will be flexible enough to enable later-stage investments, it says.

Qihoo has made several investments in Israel over the past year, including investments in two of the country’s leading venture funds, Carmel Ventures and Jerusalem Venture Partners. It has also led a round of investment in Israeli image-recognition-technology company Cortica Inc.

The company has made at least two more investments in Israeli startups, according to a person familiar with the deals: one in gesture-control-technology company Extreme Reality Ltd. and another in messaging-app maker Glide Talk Ltd. Both companies declined to comment.

Interest in Israeli tech investments by Asian investors, and specifically Chinese investors, has grown significantly in the last two years. In 2013, Korean tech giant Samsung Electronics Co. announced a $100 million fund dedicated to investments in the U.S. and Israel, and Chinese financial-services company Ping An allocated a fund focused on the same geographies in November 2013.

Other Chinese companies investing in Israeli venture funds have included Lenovo Group Ltd. and Baidu Inc. During the past two weeks, a representative of Qihoo met with numerous Israeli startups, including ones developing technology for wearable computing and connected homes, according to a person familiar with the company’s activities.

Thursday, November 13, 2014

Microsoft to Buy Israeli Cybersecurity Start-Up Aorato for $200 million

Microsoft Corp. buys Israel cyber security company Aorato for $200 million.

Aorato raised $10 million in January from Accel Partners Eric Schmidt's Innovation Endeavors and Glilot Capital Partners, and private investors Mickey Boodaei, a co-founder of Imperva Inc. and Trusteer. Last year Boodaei earned $151 million from the sale of Trusteer to IBM.

Aorato was founded in 2012 by CEO Idan Plotnik, VP R&D Michael Dolinsky, and VP professional services Ohad Plotnik. The company is based in Herzliya and has 10 employees and has raised $11 million to date.

All the founders served in the IDF cyber security unit, and have a decade of experience in the field.

The Plotnik brothers previously founded Foreity which was acquired by Aman Group in 2012.

Wednesday, November 12, 2014

Xiaomi to buy stake in Youku Tudou as part of online video push

Xiaomi Technology Co Ltd will acquire a stake in Chinese video streaming firm Youku Tudou Inc, cementing ties between China's leading smartphone maker and one of the most popular content providers in the video-hungry country.
In a joint statement on Wednesday, the companies said the transaction would take place on the open market but did not specify how large the smartphone maker's stake would be or how much would be invested.
Word of the stake acquisition, coming a week after Xiaomi pledged to invest a total of $1 billion (628.22 million pound) to expand its Internet TV content, adds to the frenzy in China's fast-growing online video market. E-commerce giant Alibaba Group Holding Ltd already owns nearly a quarter of Youku Tudou.
Online video sites include those run by Sohu.Com Inc, Baidu Inc's iQiyi and Tencent Holdings Ltd have been jockeying for position in a market estimated to be worth $3 billion in 2014.
Youku Tudou and Xiaomi will jointly invest in the production and distribution of online video content and films, while Xiaomi will license Youku Tudou's video content, the companies said.
But Xiaomi may be entering a regulatory quagmire. China's authorities have in recent months moved to cut unapproved and "harmful" online TV content, which had been freely proliferating.
The world's third-largest smartphone maker has been ramping up its push into the living room by offering a set-top box as well as a Mi TV television set.

The investment in Youku Tudou shows how Xiaomi's strategic direction may put it increasingly at odds with Alibaba, the $285 billion behemoth that also offers set-top online video boxes.
As of May, Alibaba Group owned a 23.4 percent stake in Youku Tudou, now worth slightly more than $1 billion, part of the e-commerce titan's own push into selling digital products such as online film and TV.
Alibaba, meanwhile, has long been rumoured to be interested in the mobile handset market, although Executive Vice Chairman Joe Tsai told reporters this week he didn't think Alibaba had plans to buy a phone maker.
"The question was are we going to go out and buy a (handset) manufacturer to accomplish what we want. I don't think so."
In August 2013 Xiaomi invested in Israel's leading gesture control start-up Pebbles Interfaces.

Monday, November 10, 2014

Israel’s Meekan gets US$870K in seed fund led by Horizons Ventures

Tel Aviv-based scheduling app Meekan has secured $870,000 in seed funding. Horizons Ventures was the lead investor. According to the firm, the capital will be used for product development as well as to add more personnel to its R & D and sales staff.

Meekan, the Israeli-based startup developing the technology that will connect the world’s calendars, has announced a seed funding round of $870k: $750k from Horizons Ventures and $120k from private investors. The funds will go towards developing a portfolio of products based on Meekan’s patent-pending technology, as well as expanding its R&D and sales workforce.

‘We are honored to have Horizons Ventures as our investors and welcome Gilad Novik to our board of directors. Over the past months we’ve worked hard on developing a portfolio of products that will provide the best value for consumers and businesses alike’, said Lior Yavor, Co-Founder & CEO. ‘The scheduling & optimization engines we develop can disrupt several industries and we have much more in store.’

Meekan was founded in 2013 by a father-son duo, Lior & Eyal Yavor, along with veteran product executive Matty Mariansky. As VP Operations and Chief Pilot at El-Al Israeli Airlines, Lior has experienced too many times what happens when a 15-people meeting needs to be rescheduled, so he brought this up at the Friday dinner table, which sparked Eyal’s problem-solving mind.

Meekan’s scheduling & optimization engines are the core of the technology, alongside the Flexible Time Algorithm. 3 months ago the company released a beta version of its iOS app for iPhone and iPad devices, which aims at simplifying scheduling of business meetings. Meekan for iPhone/iPad can pinpoint the best times for a meeting, taking into account free/busy availability, time zones and working hours, of all attendees – regardless of their calendar vendor (Gmail, Google Apps, Exchange/Office365 and iCloud).

Gilad Novik, CTO at Horizons Ventures: ‘”Scheduling meetings is a daily task, and it is also often a time consuming one, especially when different time zones and many parties are involved. Bolstered by the Flexible Time Algorithm, Meekan takes the hassle out of this task, and provides a simple solution to an avoidable inconvenience, allowing us to work more efficiently – it is much more than a productivity or calendar app. We are thrilled Meekan is joining the family at Horizons Labs.”

The company is continuing to develop its portfolio of products, which includes the iPhone/iPad app and an API for 3rd party developers and online booking services. An Android app and an Outlook plugin are coming soon, along with an enterprise product for businesses running on Microsoft Exchange.

Friday, November 7, 2014

Chinese tech giant Founder to open Israel subsidiary

Founder Technologies, a subsidiary of the Founder Group, one of China’s biggest companies, is set to open a subsidiary in Israel, according to documents released by the company. In 2012, Founder it took in $9.9 billion and had a net worth of $5.2 billion, operating in 80 countries.

Now it’s adding Israel, the company said in documents filed with local regulatory authorities, establishing a company in Tel Aviv to be called FounderTech (Israel) Limited. The Israeli company will belong to Founder subsidiary Shanghai Founder Technology (HK) Limited, and will concentrate on providing smart cities solutions. Participating in projects to be developed in Israel will be two other Founder organizations, Founder International Software Co. and Founder Broadband Network Service Co.

Staff will be hired locally, and the Israel operation will seek to reach out and work with Israeli start-ups and tech firms to develop its solutions, the Founder documents said, with solutions to be marketed in Israel and abroad.

Founder, established by Peking University in 1986, is perhaps China’s biggest tech conglomerate, supplying software, hardware and services to companies in five major industry groups via its divisions: PKU Founder IT Group (IT), PKU Healthcare Group (health care and pharmaceuticals), PKU Resource Group (real estate), Founder Financial (finance), and Founder Commodities (commodities trading).

It’s the latest in a series of deals between Israel and China in recent weeks. Last week, Chinese pharmaceutical giant WuXi PharmaTech — one of the world’s largest medical research companies — announced that it would open an office in Israel to “promote WuXi’s broad platform of integrated R&D services to local customers.” It will also be on the lookout for promising investments in the biotech and medical devices spheres, in cooperation with its new partner Pontifax, a venture capital firm that specializes in medical industry investments. Before that, another Chinese life sciences firm, Fosun Pharmaceuticals, announced that it was investing Israel’s Check-Cap, developer of a new technology to allow for non-invasive colon cancer screening. Fosun led the round that brought an additional $12 million in financing to Check-Cap.

That announcement coincided with one by Israel’s Carmel Ventures, which established a new investment fund valued at $194 million, with the assistance of Chinese giants like web services provider Baidu, insurer Ping-An, and software company Qihoo360, among others.

The Founder announcement came as Chief Scientist Avi Hasson was leading the biggest “roadshow” of Israeli life science companies ever to visit China. The roadshow, which runs through mid-November, will feature 13 Israeli companies in life science industries such as pharmaceuticals, medical equipment, medical communication and software, bio-informatics and others visiting seven cities throughout China, where they will hold more than 700 meetings with potential investors and partners.

The roadshow, Hasson’s office said, “is another of the multi-tiered efforts the Office of the Chief Scientist at the Israeli Ministry of Economy is making to increase accessibility to the Chinese market by Israeli companies. In recent years, we have been making significant efforts to increase cooperation with China in light of the huge, as-yet untapped potential of this market. Experience shows that the roadshow’s activity yields real fruit for companies, by cementing deals and long term cooperation.”

Thursday, November 6, 2014

China's Xiaomi to invest $1 bln to expand internet TV content

China's Xiaomi Technology Co Ltd said it would spend $1 billion to expand its internet TV content as the world's third largest smartphone maker ramps up its push into the living room, and a market estimated to be worth $3 billion.

Xiaomi's burgeoning TV unit includes its Xiaomi TV as well as a set-top box, which both use its SOFTWARE and content. The company is best known for its budget smartphones and tablets that have won it legions of fans worldwide.

In a post on its official Weibo microblog, Xiaomi said it had hired Chen Tong, a former executive at Chinese internet firm SINA Corp, to overhaul the TV business and make it more "diverse and exciting". "We want to repeat the success of Xiaomi's hardware integration model in the television industry," Chen said at a press conference, according to Xiaomi's microblog.

The company did not to provide further details.

Xiaomi's expansion of its internet TV business pits it against local internet companies including Alibaba Group Holding Ltd, Tencent Holdings Ltd and BAIDU Inc, all of which have recently increased their investment into internet TV, a market Chinese consultancy iResearch says is estimated to be worth $3 billion in 2014. Xiaomi said it could invest further in internet TV in the future.

Saturday, November 1, 2014

Xiaomi Becames World's Third Biggest Smartphone Company

China's Xiaomi Inc has become the world's third-largest smartphone vendor just three years after first hitting the market, trailing only Samsung Electronics Co Ltd and Apple Inc, according to a new industry study.

Xiaomi is exploring the option of raising funding that could value the company at more than $40 billion.

Multiple sources confirmed that Xiaomi is considering raising more money and possibly quadrupling its previous valuation of $10 billion, which it attained after an undisclosed amount of funding in August of last year. Prior to that Xiaomi had raised $216 million in June 2014 at $4 billion.

Strategy Analytics said Xiaomi accounted for 6 percent of all 320 million smartphones shipped during July-September. Samsung made up 25 percent, down from 35 percent a year earlier due to rising competition from several directions.

Apple's share also fell slightly to 12 percent.

"Xiaomi was the star performer," Strategy Analytics Executive Director Neil Mawston said in a statement.

"Samsung continues to face tough competition from Apple at the higher-end of the smartphone market, from Xiaomi and Huawei in the middle-tiers, and from Lenovo and others at the entry-level."

Xiaomi has been the top seller in its home market of China and recently entered India, where it sells phones exclusively through e-commerce site Flipkart.

Vice President Hugo Barra told Reuters in Bangalore last month that the company aimed to sell 100,000 phones a week in India in October when the country celebrates Diwali.

Xiaoning invested last year an undisclosed amount in Israeli gesture control start-up Pebbels Interfaces. 

Xiaomi reported sales in the first half of 2014 to be about $5.31 billion–up about 150% from last year—and those inside the company expect revenue to be more than $11 billion for the whole year. At a potential valuation of $40 billion, Xiaomi, which does not discuss profits but is reported to be profitable, would be trading at a little under four times projected 2014 revenues. Apple has a current price-to-sales ratio of 3.7.