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KaiOS, mobile phone platform startup, raises modest $3.4 million to target growth in Africa • CableFree TV

Smartphone shipments have been decline It’s been a tough year for mobile phones, and that has meant even more pressure on an already fragile segment of the mobile market: mobile phones. Today, one of the players in this field, the launch of the mobile phone operating system Kaiosreceives a small financial injection that both speaks to this pressure, but also offers a chance to grow in what remains in the market: selling cheaper and less expensive, but ultimately still functional and usable devices to the poorest consumers in developing countries. economies of sub-Saharan Africa.

The Hong Kong-based feature phone startup, previously backed by strategic investors like Google and TCL, is gaining momentum. $3.4 million from Finnfundimpact investor from Finland.

Finnfund’s funding is in the form of convertible promissory notes, which means they can be converted into shares in a potential future funding round.

We have reached out to Sebastian Codville, founder and CEO of KaiOS, to ask if there are any further financial activities planned and will update this post as more information becomes available. It’s been a while since KaiOS raised (or rather disclosed) third-party investments: its latest funding was in 2019 when he raised $50 million from investors including Cathay Innovation, Google and TCL.

Finnfund and KaiOS said today’s money will be used to develop KaiOS’s business in sub-Saharan Africa, the main market for low-end, lower-end devices. Africa is at the center of investor attention, and it has also directly supported a number of start-ups in the region, including food supply chain startups. Twiga and fintech Jumo.

“With this investment, KaiOS can expand into new markets in sub-Saharan Africa,” Codeville said in a statement. “We are delighted to be partnering with an investor like Finnfund who shares our vision of how important it is to drive digitalization in Africa.”

Finnfund estimates that around 3.4 billion people in the world today do not have access to the Internet, mostly in developing countries, and mainly because they cannot afford smartphones. Finnfund estimates that even the cheapest smartphones, such as Google’s Android OS, can generate up to 20% of consumers’ monthly income. (After a bit of math, Finnfund investments is $0.001 or 1/10 cent of the investment per potential user.)

The main idea of ​​KaiOS is that it is a low-cost alternative for mobile phone manufacturers who want to create feature-rich phones that can compete with low-cost smartphones. Equipped with applications and other distinctive features of phones with Internet access, KaiOS currently lists 41 phone models. running their own operating system, and the cheapest devices sell for about $10.

But the startup has a difficult task ahead of it.

KaiOS spent its early years on the wings of big promises. It started life in 2017 as a fork of Firefox OS., which was an ill-fated attempt by Mozilla and partners to create a viable smartphone platform to rival Apple’s Google-supported Android and iOS. Optimistically speaking, the KaiOS team saw an opportunity to target the lower end of the consumer market in developing countries and combine research and development aimed at these users on a single platform for phones with advanced features.

Others agreed, and KaiOS quickly enlisted OEMs like Nokia as well as software partners to build its ecosystem. Even Google, holding back its stakes, wanted to make sure it had a strong role in the mobile phone segment even as Android increased its market share, and therefore became a strategic partner with KaiOS, investing tens of millions of dollars in the startup.

But things didn’t go as expected.

When KaiOS announced funding in 2019, it said it had shipped about 100 million devices using its OS. At the time, IDC predicted that 500 million mobile phones would ship annually over the next five years. Today, the company says it has shipped “more than 170 million” KaiOS-based devices — with active users on the market is a much smaller number of about 100 million. it rated that KaiOS accounts for 0.07% of the total mobile market today. In contrast, Android, which itself powers an increasingly cheaper lineup of smartphones, has just over 71%, while iOS has a 28.3% share.

In addition to a small share of the mobile phone market, its total sales is also in decline. India, followed by China, Pakistan and Bangladesh, are the countries that dominate mobile phone market today. But on the other hand, given that Nigeria is the only country in Africa to be in the top 5 mobile phone markets (that’s number five), that means there’s still potential in the rest of the continent, something that Finnfund is hoping for. for further development.

“The investment in KaiOS is another important step in connecting the unconnected,” Finnfund investment manager Kuutti Kilpeläinen said in a statement. “KaiOS has proven it can solve the accessibility challenge and we are proud to join a group of investors who share the same ambitious goal of closing the digital divide.”

By Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org