Facebook actually came close to investing in Xiaomi

Here’s something unexpected: according to Reuters, Mark Zuckerberg met with Xiaomi CEO Lei Jun in order to discuss an investment by Facebook into the burgeoning Chinese smartphone manufacturer. The deal would have been excellent for both companies, granting Xiaomi some more brand recognition and helping Facebook ease past Chinese censors in the future. Unfortunately, Jun allegedly called it off out of fear of the kind of political fallout that such a deal would cause.

Mark Zuckerberg and Xiaomi Inc CEO Lei Jun discussed a potential investment by Facebook in China’s top smartphone maker ahead of its $1.1 billion fundraising last month, but a deal never materialized, several people with knowledge of the matter told Reuters. The discussions, at a private dinner when Zuckerberg visited Beijing in October, were never formalized, three of those people said, as the two CEOs weighed the political and commercial implications of Facebook – which has been banned in China since 2009 – buying into the Chinese tech star now valued at $45 billion. One individual with direct knowledge of Xiaomi’s fundraising said the mooted Facebook investment was “not huge,” but the talks underscore how ties between U.S. and Chinese companies have deepened as China’s tech industry matures. A Facebook investment in Xiaomi would have raised the international profile of the popular handset maker dubbed “China’s Apple” by its fans and linked it to a U.S. social networking phenomenon with more than 1.3 billion users.