If the unit economy is truly 45.5% then it’s not very bad. However, if we take my argument and further deduct the 21% incentives cost from the margin, we’re left with 24.5% actual Contribution Margin. Not exactly the sexy platform business that we all dream of.
Accel (17.2%) stands to cash out $1.376B, Insight Venture Parnters (16%) $1.28B and Sequoia (10.7%) $856M. The three of them put in a total of only $400M. It’s a big win for every one.
3X. Yes, that magic number that haunted all hardware companies and drove (most lazy) VCs away from investments in hardwares. The market is currently seeing Xiaomi as a pure hardware company. It will take time to see if the market will buy into Lei Jun's "Xiaomi is an internet company" in the future.