Help Wanted: 25-Year-Old’s China Phone Startup Seeks VC Funding
OnePlus, a China-based smartphone maker, is in talks to obtain Silicon Valley venture capital funding to help double its workforce as it boosts output.
OnePlus, which offers phones at less than half the price of flagship models by Samsung Electronics and Apple, plans to boost staff to 1,500 employees this year, said co-founder Carl Pei, who started the company in 2013 with six people.
The smartphone maker is betting on demand for full-featured phones at mid-range prices while bidding for talent amid intensifying competition among companies including Xiaomi, Lenovo Group and Huawei Technologies. OnePlus plans two new models for this year and aims to increase unit shipments 10- fold by next year, said Pei, 25.
“We lack the experience to help us grow one step further, so we are actually in talks with VCs in the Valley,” Pei said in an interview at company headquarters in Shenzhen, China. “The most important part is access to experience and senior- level talent that will help us scale further.”
He declined to give an estimate of the amount of funds to be raised or the company’s valuation.
OnePlus sold more than a million One smartphones in 2014, offering the device to buyers by invitation only. It plans to ship between 3 million and five million units this year, and then double that to 10 million units next year, using a combination of online and invitation sales, chief executive Pete Lau said.
The One sells for $299 and two-thirds of last year’s sales were in overseas markets including the US, the UK and India.
“It’s a very high-end product at a very affordable price,” said Bryan Ma, a Singapore-based analyst at research firm International Data Corp. “They have been able to build up a very, very loyal fan base and that’s really where a lot of the value of the company is today. They’ve got people who are just, you know, waiting for that next thing they’re going to announce.”
Samsung, which is virtually tied with Apple in smartphone shipments, introduced its S6 last week, offering models from 858,000 won ($780). Apple’s newest model, the iPhone 6, sells for $649 at T Mobile US.
China-based Coolpad Group and ZTE are also expanding their business globally, adding to competition at the low-priced end of the market.
The One’s successor, the OnePlus Two, is anticipated in the third quarter, Lau said. Another phone, a cheaper model, is planned for release by the end of the year, he said, without supplying details.
Initially, OnePlus sold devices only to people who had received an invitation by participating in contests or promotions. In February, the company also began holding weekly open sales online. The invite system has allowed OnePlus to run lean, keeping “almost no inventory,” Pei said.
The invite system plus weekly online sales will be continued with the release of the Two device, while the original One smartphone will become available through unrestricted online sales.
Production of OnePlus devices is outsourced to Guangdong Oppo Electronics, the Dongguan, China-based maker of smartphones and Blu-ray players where Lau and Pei worked before going on their own.
OnePlus also plans to increasingly focus on selling software and services to users of its phones, Lau said.
“We’re hoping to develop a platform,” Lau said. “What I’m thinking is, for example in five years, we will become a platform host and allow many software developers to use our platform to give end users more choice.”
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Source: The Jakarta Globe