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Google and Qualcomm join $230 million investment in Nokia phone maker HMD Global


HMD Global, the “home of Nokia phones,” has raised $230 million in a “series A2” round of funding from some of its existing strategic partners, including Google, Qualcomm, Nokia’s consumer division Nokia Technologies, among other undisclosed backers. The Finnish company stressed that this was the “first closing” of the round, suggesting that more could be added to the pot at a later date.

A spokesperson also confirmed that HMD Global’s valuation now sits at more than $1 billion. While Nokia itself no longer makes consumer devices, the brand is still synonymous with feature- and smartphones thanks to a licensing arrangement with HMD Global, a business vehicle founded in 2015 primarily to design and market Nokia-branded mobile phones, with Foxconn subsidiary FIH Mobile responsible for manufacturing.

In the intervening years, HMD Global has brought several dozen Nokia phones to market, from low-end basic handsets to top-of-the-line flagships sporting multiple Zeiss cameras.

Nokia 9 PureView

Above: Nokia 9 PureView sports 5 Zeiss lenses

Image Credit: Paul Sawers / VentureBeat

A few months back, HMD Global unveiled its first 5G device, though the Nokia 8.3 has yet to make it to market. With another $230 million in the bank, HMD Global said that it’s now well-positioned to “accelerate” its mission to make 5G smartphones accessible to more consumers globally — this will involve developing more alliances with U.S. carriers, it said, building on its existing partnerships which kicked off last year with Verizon, Cricket Wireless, and AT&T.

Backers

HMD Global raised $100 million back in 2018 from Swiss VC firm Ginko Ventures, DMJ Asia Investment Opportunity, and Wonderful Stars, a subsidiary of FIH Mobile. The high-caliber nature of HMD Global’s latest roster of investors is indicative of where the Nokia brand could go from here, and as Google reels from the U.S. embargo that prevents Huawei from using Google’s mobile apps and services, it has a clear vested interest in pushing another phonemaker up the smartphone ladder.

As a European company, and the only remaining smartphone player on the continent with any meaningful market share, HMD Global is less likely to get caught in the geopolitical crossfire between the U.S. and China. Last year, HMD Global moved its data center from Singapore to Finland, in partnership with Google Cloud — this will also go some way toward allaying data privacy concerns.

In truth, HMD Global’s smartphone market share sits at somewhere around 1%, according to Counterpoint Research, making it the 13th biggest vendor in the world. But underpinned by the familiar Nokia brand, and with major partners on board including Google, chip giant Qualcomm, and U.S. carriers, things can change quickly. Huawei and its sub-brand Honor will no longer appeal to millions of consumers outside of China given the restrictions they face, which potentially opens a gap for another player to fill.

Moreover, HMD Global’s ambitions stretch beyond the hardware realm. Earlier this year, it launched a new SIM card called HMD Connect focused on roaming, while it snapped up the assets of Valona Labs, a mobile, enterprise, and cybersecurity software company. At the same time, HMD Global launched a new R&D “centre of excellence” to develop software-based services for Nokia devices. This will include building new offerings such as remote device locking, cybersecurity, enterprise mobility management, and — in the future — imaging and audio technologies.

In short, HMD Global has pretty big ambitions, and with Google and Qualcomm on board, it’s difficult not to take the company seriously. Even if it isn’t to make up any serious ground on the incumbents in North America and Europe, there is still significant market share to be gained in other “key growth markets” including Brazil, India, and across Africa — and that is where its $230 million cash injection could come in useful.

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