Published On: Tue, Aug 11th, 2020

Google, Nokia, Qualcomm are investors in $230M Series A2 for Finnish phone maker, HMD Global

Mobile device builder HMD Global has announced a $230M Series A2 — a initial tranche of outmost appropriation given a $100M turn behind in 2018 when it sloping over into a unicorn valuation. Since late 2016 a startup has exclusively protected Nokia’s code for mobile devices, going on to boat some 240M inclination to date.

Its latest income injection is critical both for a distance (HMD claims it as a third largest appropriation turn in Europe this year); and a form of a vital investors ploughing in collateral — namely: Google, Nokia and Qualcomm.

Though either a tech hulk (Google) whose OS dominates a world’s smartphone marketplace (Android) apropos a vital financier in Europe’s final poignant mobile OEM (HMD) catches a courtesy of informal foe enforcers stays to be seen. Er, straight formation anyone? (To wit: It’s a small over dual years given Google was slapped with a $5BN chastisement by EU regulators for antitrust violations associated to how it operates Android — and a Commission has pronounced it continues to guard a marketplace ‘remedies’.)

In a serve quirk, when we spoke to HMD Global CEO, Florian Seiche, brazen of today’s announcement, he didn’t design a names of a investors to be disclosed — though we’d already been sent press recover element inventory them so he duly reliable a contingent are investors in a round. (But wouldn’t be drawn on how many equity Google is grabbing.)

HMD’s smartphones run on Google’s Android platform, that gives a tech hulk a organisation business reason for ancillary a mobile builder in flourishing a accessibility of Google-packed hardware in pivotal enlargement markets around a world.

And while HMD likens a unchanging (and consistently updated) season of Android to a reward ‘pure’ Android knowledge we get from Google’s own-brand Pixel smartphones, a disproportion is a Finnish association offers inclination opposite a operation of cost points, and targets hardware during mobile users in building markets.

The upshot is comparatively small overlie with Google’s Pixel hardware, and still copiousness of business upside for Google should HMD grow a tube of Google services users (as it creates income by targeting ads).

Connoisseurs of mobile story might see some-more than a small irony in Google investing into Nokia branded smartphones (via HMD), given Android’s purpose in fatally disrupting Nokia’s remunerative smartphone business — knocking a Finnish hulk off a roost as a world’s series one mobile builder and ushering in an epoch of Android-fuelled Asian mobile giants. But wait prolonged adequate in tech and what goes around oftentimes comes behind around.

“We’re intensely excited,” pronounced Seiche, when we discuss Google’s pivotal purpose in Nokia’s chronological rain in smartphones. “How we are going to write that subsequent section on smartphones is a vicious vital post for a association and a event to group adult so closely with Google around this has been a very, really good partnership from a beginning. And afterwards this investment really confirms that — also for a future.”

“It’s a vicious time for a attention therefore carrying a transparent plan — carrying a transparent split and a opposite indicate of perspective to offer, we believe, is a illusory item that we have grown for ourselves. And now is a good impulse for us to double down on this,” he added.

We also asked Seiche either HMD has any seductiveness in holding advantage of a European Commission’s Android antitrust coercion preference — i.e. to flare Android and mislay a common Google services, maybe swapping them out for some European alternatives, that is during slightest a probability for OEMs offered in a shred — though Seiche told us: “We have looked during it though we strongly trust that consumers or craving business indeed adore [Google] services and therefore they select those services for themselves.” (Millions of dollars of approach investment from Google also, presumably, helps make a Google services business box smoke-stack up.)

Nokia, meanwhile, has always had a tighten attribute with HMD — that was determined by former Nokia execs for a solitary purpose of chartering a iconic mobile brand. (The backstory there is a proviso in a sale terms of Nokia’s mobile device multiplication to Microsoft lapsed in 2016, paving a approach for Nokia’s code to be returned to a smartphone marketplace though a before Windows Mobile baggage.)

Its investment into HMD now looks like a opinion of certainty in how a association has been executing in a fiercely rival mobile space to date (HMD doesn’t mangle out a lot of fact about device sales though Seiche told us it sole in additional of 70M mobiles final year; that’s a total figure for smartphones and underline phones) — as good as an upbeat comment of a operation of a enlargement event brazen of it.

On a latter front US-led geopolitical tensions between a West and China do demeanour staid to beget a tail-wind for HMD’s business.

Mobile chipmaker Qualcomm, for example, is confronting a detriment of business, as US supervision restrictions bluster a ability to continue offered chips to Huawei; a vital Chinese device builder that’s turn a pivotal aim for US boss Trump. Its seductiveness in ancillary HMD’s growth, therefore, looks like a approach for Qualcomm to sidestep opposite US supervision intrusion directed during Chinese firms in a mobile device builder portfolio.

While with Trump’s new threats opposite a TikTok app it seems protected to assume that no tech association with a Chinese owners is safe.

As a European company, HMD is means to position itself as a protected breakwater — and Seiche’s sales representation talks adult a concentration on confidence fact and altogether peculiarity of knowledge as pivotal differentiating factors vs a Android hoards.

“We have been really transparent and really unchanging right from a commencement to collect these core beliefs that are tighten to a heart and really closely associated with a Nokia code itself — and really security, peculiarity and trust are pivotal elements,” he told TechCrunch. “This is resonating with a conduit and sell business around a universe and it is really also a core elemental differentiator that those partners that are holding a longer tenure perspective clearly see that same event that we see for us going forward.”

HMD does use production comforts in China, as good as in a series of other locations around a universe — including Brazil, India, Indonesia and Vietnam.

But asked either it sees any supply sequence risks associated to continued use of Chinese manufacturers to build ‘secure’ mobile hardware, Seiche responded by claiming: “The many critical [factor] is we do control a program knowledge fully.” He forked privately to HMD’s merger of Valona Labs progressing this year. The Finnish confidence startup carries out all a program audits. “They fundamentally control a program to make certain we can live adult to that devoted standard,” Seiche added. 

Landing a vital tranche of new appropriation now — and with geopolitical tragedy between a West and a Far East resplendent a spotlight on a value as alternative, European mobile builder — HMD is eyeing enlargement in enlargement markets such as Africa, Brail and India. (Currently, HMD pronounced it’s active in 91 markets opposite 8 regions, with a inclination ranged in 250,000 sell outlets around a world.)

It’s also looking to move 5G to inclination during a larger operation of price-points, over a stream flagship Nokia 8.3. Seiche also pronounced it wants to do some-more on a mobile services side. HMD’s initial 5G device, a flagship Nokia 8.3, is due to land in a US and Europe in a matter of weeks. And Seiche suggested a timeframe of a center of subsequent year for rising a 5G device during a midst tier cost point.

“The 5G tour again has started, in terms of marketplace adoption, in China. But now Europe, US are a pivotal subsequent event — not only in a reward tier though also in a midst segment. And to get to that as quick as probable is one of a goals,” he said, observant joint-working with Qualcomm on that.

“We also see good event with Nokia in that 5G transition — since they are also operative on a lot of private LTE deployments that is also an engaging area since… we are also really strongly benefaction in that vast craving segment,” he added.

On mobile services, Seiche highlighted a launch of HMD Connect: A information SIM directed during travellers — suggesting it could enhance into additional connectivity offers in future, forging some-more partnerships with carriers. 

“We have already launched several services that are tighten to a hardware business — like word for your smartphones — though we are also now looking during connectivity as a good area for us,” he said. “The initial commander of that has been a tellurian roaming though we trust there is a play in a destiny for consumers or craving business to get their connectivity directly with their device. And we’re partnering also with operators to make that happen.”

“You can see us some-more as a element [to carriers],” he added, arguing that business “dynamics” for carriers have also altered almost — and patron merger hasn’t been a linear diversion for some time.

“In a identical approach when we speak about Google Pixel vs us — we have a opposite footprint. And again if we demeanour during carriers where they get their subscribers from currently is already currently a brew between their possess approach channels and their partner channels. And indeed because wouldn’t a smartphone actor be a healthy good partner of choice also for them? So we consider you’ll see that as a trend, potentially, elaborating in a subsequent integrate of years.”

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