Nokia phones maker HMD picks up $230 million in new funding from Google, Qualcomm and Nokia

HMD World’s Nokia 2720 Flip function cellphone on show at a press briefing held in London on September 2, 2019.

Ryan Browne | CNBC

HMD World, the corporate behind new Nokia-branded telephones, has secured $230 million in recent funding from traders together with Google, Qualcomm and Nokia.

The Espoo, Finland-based agency mentioned Tuesday that it might use the capital to put money into the event of 5G smartphones, which it hopes to promote in the U.S. in partnership with local carriers. The money may even be used to assist HMD develop in markets like Brazil, Africa and India and transfer past {hardware} into different areas like software program and companies.

HMD has held the rights to design and market Nokia telephones since a joint deal with Foxconn to purchase the Finnish telecoms big’s cellular unit from Microsoft in 2016. Foxconn manufactures the handsets whereas Nokia will get royalty funds for every cellphone HMD sells. HMD offered 70 million telephones final 12 months and claims to have offered over 240 million to this point.

Microsoft’s preliminary Nokia acquisition in 2014 was notoriously ill-fated because of the failure of its Home windows telephones. HMD has seemed to show the enterprise’ fortunes round by launching new variations of nostalgic Nokia handsets just like the 8110 “banana phone” and 2720 flip phone, in addition to premium Nokia-branded smartphones that run on Google’s Android cellular working system.

“We imagine this clear give attention to a premium and well-differentiated smartphone expertise is one thing that units us aside,” HMD CEO Florian Seiche informed CNBC in an interview. “Clearly our companions … have confirmed their perspective as properly and are giving us sturdy endorsement to speed up our progress within the coming years.”

Seiche added the corporate was nonetheless closely investing in function telephones — also referred to as “dumbphones” in distinction with smartphones — however mentioned it has seen a shift from function telephones to smartphones in markets comparable to Africa. The corporate touts its smartphones as a extra inexpensive various to these of larger gamers like Samsung and Apple, and has partnered straight with Google to present customers common safety updates on Android.

HMD informed CNBC that it made 1.7 billion euros ($2 billion) in internet income final 12 months, down virtually 30% from 2.four billion euros in 2018, which it mentioned was resulting from decreasing its presence in markets that required additional funding. The corporate’s losses mounted in 2019, rising greater than 50% to 295 million euros.

The coronavirus disaster has deeply impacted the smartphone market, with market analysis agency IDC expecting smartphone shipments to say no 11.9% year-on-year to 1.2 billion. HMD has switched focus to on-line gross sales through the Covid-19 pandemic and Seiche mentioned this allowed it to return to profitability in June.

“This has actually been a difficult setting, nevertheless what we will say is we’re additionally seeing some key shifts available in the market that we imagine have been actually accelerated due to Covid … the most important being the shift to on-line buying,” Seiche mentioned. “That’s not a short lived factor however that’s going to remain.”

It is the second time in HMD’s historical past that the start-up has raised cash from outdoors traders. The first was in 2018, when the enterprise was valued privately at greater than $1 billion, giving it so-called unicorn standing.

HMD declined to reveal its new valuation on this funding, which it mentioned was the primary closing of an even bigger funding spherical. The corporate is majority-owned by Sensible Join, a non-public fairness fund managed by former Nokia govt Jean-Francois Baril.

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PJ is the Digital Marketer & Founder of PJ Digital Marketing, has involved in this field from 2010 onwards. Also the owner of a few more sites in different fields.