/Faltering smartphone maker Meizu to raise USD 30 M financing

Faltering smartphone maker Meizu to raise USD 30 M financing

Meizu, a Chinese smartphone company, is set to land new financing – even though it is currently running at a loss and facing a patent infringement accusation from Qualcomm.

Telling Telecommunication Holding Co., a company that is listed on China’s Shenzhen Stock Exchange, officially announced on Thursday that it will invest RMB 200 million (USD 30 million) in smartphone maker Meizu, buying a 0.655% stake in the company. After the investment, the smartphone company will be valued at around RMB 30.5 billion.

Founded in 2003, Meizu started as an MP3 maker and then transformed itself to a smartphone company in 2007.

The timing is not perfect for the investor, as it disclosed in the investment announcement that Meizu, based in the coastal Chinese city of Zhuhai, lost RMB 1.3 billion in the 18 month period ending on June 30.

What’s worse, chip giant Qualcomm in June in Beijing accused Meizu of patent infringement, demanding compensation of RMB 520 million. This month Qualcomm expanded the battlefield beyond China and sued Meizu in the United States and Germany. Meizu has responded that it would like to pay a patent fee to Qualcomm if the price is appropriate.

The investor said that this investment will help them secure a “sufficient supply of smartphones” and form a strategic partnership with the smartphone maker.

(Top photo from Meizu.com)

Wang is a contributor at ACT. She is passionate about literature, photography and technology. She graduated from Shanghai University of International Business and Economics.