HMD Globals Nokia 2720 Flip function phone on display screen at a press briefing kept in London on September 2, 2019.
Ryan Browne|CNBC
The Espoo, Finland-based firm said Tuesday that it would use the capital to invest in the development of 5G smartphones, which it wants to sell in the U.S. in collaboration with regional carriers. The cash will likewise be used to help HMD broaden in markets like Brazil, Africa and India and move beyond hardware into other locations like software application and services.
HMD has held the rights to style and market Nokia phones given that a joint handle Foxconn to buy the Finnish telecoms giants mobile system from Microsoft in 2016. Foxconn manufactures the handsets while Nokia gets royalty payments for each phone HMD offers. HMD offered 70 million phones last year and declares to have offered over 240 million to date.
HMD Global, the company behind new Nokia-branded phones, has protected $230 million in fresh financing from investors consisting of Google, Qualcomm and Nokia.
” We believe this clear focus on a premium and well-differentiated smart device experience is something that sets us apart,” HMD CEO Florian Seiche informed CNBC in an interview. “Clearly our partners … have confirmed their point of view as well and are offering us strong endorsement to accelerate our development in the coming years.”
HMD declined to divulge its brand-new appraisal in this financial investment, which it said was the very first closing of a larger financing round. The business is majority-owned by Smart Connect, a personal equity fund managed by previous Nokia executive Jean-Francois Baril.
Seiche included the business was still heavily buying function phones– likewise referred to as “dumbphones” on the other hand with mobile phones– however stated it has seen a shift from function phones to smartphones in markets such as Africa. The company promotes its smartphones as a more cost effective alternative to those of larger players like Samsung and Apple, and has actually partnered straight with Google to give users routine security updates on Android.
” This has certainly been a challenging environment, nevertheless what we can state is we are likewise seeing some essential shifts in the market that we believe have actually been actually sped up because of Covid … the biggest being the shift to online acquiring,” Seiche said. “That is not a short-lived thing however that is going to stay.”
HMD informed CNBC that it made 1.7 billion euros ($ 2 billion) in net earnings in 2015, down almost 30% from 2.4 billion euros in 2018, which it stated was due to reducing its existence in markets that needed even more financial investment. The companys losses installed in 2019, rising more than 50% to 295 million euros.
The coronavirus crisis has deeply affected the smart device market, with market research study company IDC anticipating smartphone shipments to decline 11.9% year-on-year to 1.2 billion. HMD has actually changed focus to online sales throughout the Covid-19 pandemic and Seiche said this enabled it to return to profitability in June.
Microsofts preliminary Nokia acquisition in 2014 was notoriously unfortunate due to the failure of its Windows phones. HMD has aimed to turn the business fortunes around by releasing new versions of classic Nokia handsets like the 8110 “banana phone” and 2720 flip phone, as well as premium Nokia-branded smart devices that operate on Googles Android mobile operating system.
Its the 2nd time in HMDs history that the start-up has raised cash from outside financiers. The first was in 2018, when the service was valued privately at more than $1 billion, offering it so-called unicorn status.
