Chinese handset maker Xiaomi is betting big on start-ups and has earmarked about $100 million over the next two years to invest in this segment. It is also looking to fund Indian startups and build an eco-system for innovation.

“We are looking at investment in start-ups in India which includes few technology companies working on mobile internet and connected devices,” Manu Kumar Jain, head of India operations, Xiaomi, said.

“From hardware perspective, we do not see many start-ups but we are looking out for software start-ups who can become synergetic to our operations as well,” Jain said. While he refused to give any indication on the average size of funding but expressed confidence that it would invest in a “few this year”.

Xiaomi, which has received a personal investment from Ratan Tata, is making a big push to become a local player in the country with committed investments for a manufacturing plant, R&D centre, e-commerce operations and after sales services. This would also involve setting up of an R&D centre in Bengaluru.

“India is an important part of Xiaomi’s business focus. We are setting up an R&D centre in Bengaluru on a 25,000 sft space which is expected to be opened by the end of this month,’’ Jain said.

Besides, the company is in advanced talks with a few states to start a manufacturing facility which would initially meet the demands of the domestic market.

Further, the company is expanding its service centres and is also piloting its “pick up and drop” service in select cities. “We are quite bullish on our e-commerce venture which also carries huge investments. We are in the process of setting up warehouses and logistics to strengthen our e-commerce platform,” Jain said.

Xiaomi, which had raised $1.1 billion in December 2014, with a valuation of over $45 billion, had sold over a million smartphones in the first four months of its entry into the Indian market in July 2014. It is the fifth-largest player in the domestic market with a share of 4%. The five-year-old company, which rolled out its first smartphone in August 2011, had sold 61.1 million units globally last year, against 18.7 million units in 2013.

The company is also planning to bring in more categories apart from mobile phones to the Indian market. “Our biggest priority is to bring multiple categories like internet-connected devices to the domestic market. While Xiaomi Mi Band, a wearable fitness tracker, is already available in India, we are in the process of launching Xiaomi Mi Box, a tiny box that turns an ordinary TV into a smart TV, by this December, followed by Xiaomi smart TV in 2016, air purifiers and routers, “ he said.