Chinese Facebook Clone Raises $430M

Xiaonei, the Chinese clone of Facebook, has raised a whopping $430 million, beating out Facebook in the size of their financing rounds. No word on the valuation at this point but the move was clearly aimed at making a statement about Xionei’s dominance in China prior to an entry by Facebook. Considering that MySpace was the first exit in this space at an acquisition price of $570 million, $430 million just for a round of funding seems pretty ridiculous.

This could potentially be the largest round of funding for a social networking site to date. Alexa data ranks the site as the 370th most popular site on the web. I’m not sure if this data is completely accurate but no matter what their traffic is, the company is cash flow positive according to an interview which Matt Marshall had with one of early investors, David Chao.

Matt also questioned David Chao about the design of the site and how it resembles Facebook. David said that he thinks the site actually resembles IBM and mentioned that many sites use various shades of blue nowadays. While it’s clear that the site is a direct ripoff of Facebook, it also appears that the investors could care less. Given that China now has the largest online population, Xiaonei is poised to potentially become one of the largest social networking sites on the web.

Join Baratunde Thurston (left), The Onion’s Director of Digital and author of How to Be Black, for an entertaining look at creative social media campaigns in our Social Media Marketing Boot Camp starting February 16. Other speakers include Morin Oluwole (Facebook), Tim Devane (bitly), and SocialTimes' writer Devon Glenn.   Register now.