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, and Nokia consumer division Nokia Technologies, along with undisclosed investors. The Finnish company stressed that this was the “first closing” of the round, suggesting more funding could be added at a later date.

A spokesperson also confirmed that HMD Global’s valuation has passed $1 billion. While Nokia no longer makes consumer devices, the brand is still synonymous with feature phones 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.

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 it’s now able to “accelerate” its mission to make 5G smartphones accessible to more consumers globally. This will involve developing more alliances with U.S. carriers and building on existing partnerships with Verizon, Cricket Wireless, and AT&T that kicked off last year.

Backers

HMD Global raised $100 million 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 suggests where the Nokia brand could go from here. And as Google reels from the U.S. embargo preventing Huawei from using its mobile apps and services, the company has a vested interest in pushing another phone maker up the ranks.

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 shifted its datacenter from Singapore to Finland, in partnership with Google Cloud, a move that will go some way toward allaying data privacy concerns.

HMD Global’s ambitions stretch beyond the hardware realm. Earlier this year, it launched a new SIM card called HMD Connect that’s focused on roaming, and it snapped up the assets of mobile, enterprise, and cybersecurity software company Valona Labs. At the same time, HMD Global launched a new R&D “center 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, the company is making a bid for serious consideration. Even if it isn’t going to make big gains on the incumbents in North America and Europe, there is still significant market share in play in “key growth markets” like Brazil, India, and parts of Africa.

 

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Finland-based telecommunications company Nokia on Thursday reported a profit of 116 million euros in Q1 2020,  reversing the 59 million loss in Q1 2019. Its turnover of 4.9 billion euros in the quarter, however, was slightly less than the same period of last year.

The company's CEO Rajeev Suri noted that Nokia did not see a decline in product demand in the first quarter. Nokia has noted a massive increase in network capacity demands. According to Suri, the reduction caused by the COVID-19 crisis in Q1 turnover was 200 million euros.

Suri said the sector is "not immune to the crisis," but believed it will endure it rather well. Finnish business daily Kauppalehti said Nokia exceeded analysts' expectations as they had been predicting 102 million profit. However, Nokia warned its 2020 total result will fall slightly behind earlier expectations.

For the whole year, Nokia now expects a profit margin of 9 percent, which is 0.5 percent less than the estimate in January. Nokia acknowledged that supply and delivery challenges in some countries may be encountered and customers could alter spending. Nokia said the improved result was attributed mainly to the mobile access business in the networks business and higher margins in Nokia Software.

Higher costs in the 5G research impacted the result. Nokia said 5G deal momentum continues, with 70 commercial deals and 21 live networks. However, Suri told Kauppalehti that Nokia is waiting for the result in a tender for China Unicom's network project."I am confident that we will win the agreement from China Unicom, although we have not received any official announcement," Suri told the media in a phone call after the company's Q1 earnings announcement. Kristian Pullola, the chief financial officer of Nokia, also said on Thursday that Nokia remains committed to China. "We are a long term actor there," he told Kauppalehti.

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China could also impose sanctions on European telecom equipment makers Nokia and Ericsson if the European Union bans Huawei from its member states, the Wall Street Journal reported on Monday. The news was published in the Wall Street Journal after the US decided to ban Huawei even after the US imposed the ban.

The Wall Street Journal quoted sources familiar with the matter as saying that China's finance ministry was considering controlling exports to Finland's Nokia and Sweden's Ericsson. These companies have been making their products in China and exporting them to other countries.

A Nokia spokesman, meanwhile, said in a statement: "We are aware of the geopolitical environment of a world-class company operating in various sectors. We are also aware of the risks and opportunities that this will create for us. "

Last January, the EU issued a toolbox indicating that it would not work with vendors that pose a high risk for FiveG rollouts in its member countries. However, he agreed to let Huawei become his Fiji network carrier.

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