Misfit Wearables gets $40 million in funding to expand in Asia

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Misfit announced on Tuesday that it has landed a $40 million funding round from a group of investors including rising Chinese smartphone startup Xiaomi.

Misfit manufactures fitness trackers, such as the Shine and the Flash, and also licenses its activity tracking algorithms and software to other companies, too.

The funding round also includes funding from JD.com, a Chinese commerce company often seen as a direct rival to Alibaba. Other investors include GGV Capital, who led the round, and Shunwei Capital Partners, as well as investments from previous backers including Khosla Ventures, Horizons Ventures, and Founders Fund.

Misfit believes the access to and partnership with Xiaomi will help it improve its supply chain and product development in Asia, while the investment from JD.com will help it expand its distribution capabilities in China. According to Misfit, the Shine already sells well through JD.com.

“We’ve always been Asia-oriented from the beginning,” Misfit communications director Amy Puliafito said. “It’s part of our growth strategy.”

The California-based company has raised $23 million to date, including a $15.2 million B round in November 2013 led by Horizons Ventures.

Xiaomi hasn’t publicly invested in a U.S. company before — but after raising nearly $50 billion in recent months, the company, which is most well-known for making mid-range smartphones for the Chinese market, certainly has money on hand to spend.

There’s also an interesting product component to this deal: Xiaomi already makes a fitness tracker, called the Mi Band. Earlier this week, Xiaomi announced that it has sold over 1 million Mi Bands since it the smart band went on sale earlier this year.

In fact, the Mi Band appears to have a lot in common with Misfit’s existing fitness trackers. For instance, they both lack screens, opting for a series of LEDs instead. Although Misfit’s Flash fitness tracker is relatively inexpensive for the United States market at $50, Xiaomi’s Mi Band only costs 79RMB, or about $14.

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