Phone maker HMD Global gets $230mn funds from tech giants

HMD Global, the Finland based company, has revealed that Qualcomm, Google and Nokia have invested heavily in its business.

The total investment pool is $230 million and not all of the investors were disclosed by the company but it does give a clear idea of how the Nokia brand will grow in the future.

Its new cash infusion is noteworthy for both its size, as HMD says it is this year’s third-largest funding round in Europe and the profile of cash-plugging strategic investors.

The fresh $230 million infusions, according to HMD Global, would boost its 5G growth by launching more 5G-enabled phones and also helping them enter more markets across the globe like Africa, Brazil and India.

Google is looking to usher in a new smartphone manufacturer into the top smartphone OEMs (Original Equipment Manufacturer) due to all the tension around the US government’s ban on Huawei. Further, HMD smartphones run on Google’s Android platform, which gives the tech giant a solid business purpose to support the handset maker.

With HMD Global retaining some of its staff, including its Finnish data center, it’s clear that the European smartphone company is less likely to get into the US-China trade war crossfire, so it seems like a safe bet.

The coronavirus outbreak has had a significant impact on the smartphone industry, with IDC, a market research company, expecting smartphone shipments to fall to 1.2 billion by 11.9% year on year. During this period, HMD has shifted its focus to online sales and said that this has allowed them to return to profitability in June.

“This has certainly been a challenging environment, however what we can say is we are also seeing some key shifts in the market that we believe have been really accelerated because of COVID, the biggest being the shift to online purchasing. That is not a temporary thing but that is going to stay.”

After a joint agreement with Foxconn to purchase the Nokia mobile unit from Microsoft in 2016, HMD has kept the rights to manufacture and sell the phones and is often referred to as the ‘Home of Nokia Phones’. Foxconn produces the handsets while Nokia earns royalty payments for every unit HMD sells. Last year, HMD sold 70 million phones and has reportedly sold more than 240 million to date.