Smartphone gross sales are in decline as handset makers grapple with saturated markets and a troublesome client financial local weather. However some are betting on a future the place new approaches in design and tech will nonetheless discover resonance with customers. Nothing, the London startup behind the “Cellphone” smartphone, has closed an funding of $96 million — funding that it is going to be utilizing to proceed scaling its enterprise and lineup of units, beginning with its subsequent smartphone. The Cellphone (2) — in line with its naming scheme — is because of launch within the coming weeks.
Highland Europe is main the spherical, with earlier backers GV (Google Ventures), EQT Ventures and C Capital additionally collaborating. Swedish Home Mafia can be getting a strategic stake, one which’s already being put to work. Nothing is teasing options for the brand new Cellphone (2) and yesterday it introduced that it’ll have customizable “visible” ringtones, with one of many sound packs for the characteristic composed by the digital/home music supergroup.
This funding brings the overall raised by the corporate to $250 million — together with two rounds of crowdfunding totaling some $11.5 million. Nothing is just not disclosing its valuation. (We’re looking for out and can replace as we study extra.)
The spherical, critically, is the most important raised up to now by the corporate — which closed a $70 million Collection B in March of final yr. From what we perceive it had no scarcity of inbound curiosity, regardless of the double pressures of crunch time within the smartphone market and the continued startup funding drought.
A part of the explanation for that has been its metrics: sources near the corporate affirm to us that it made $200 million in revenues in 2022 and is already on monitor to exceed that this yr. It’s additionally now bought 1.5 million units over has launched one handset and two editions of its ear buds and it’s bought 1.5 million units general, together with 800,000 handsets, from what I perceive. (For comparability, in February, CEO and co-founder Carl Pei informed us that the corporate had shifted 1 million units.)
“Over the past two years, to have the ability to do all of that on this market, it’s a testomony to what this staff can obtain,” Tom Hulme of Google Ventures stated in an interview. (Hulme additionally sits on the board of the startup.)
The brand new Cellphone machine, which is lined for a July 11 launch, will likely be a key a part of Nothing’s technique to develop. The Cellphone (1) had a restricted launch — specifically, it didn’t launch within the U.S. — due to band help. The Cellphone (2) fixes that and will likely be supplied within the U.S. market. Initially not less than, that launch is not going to be in partnership with any handset makers, we perceive.
By way of Nothing’s future product roadmap, Pei has informed us up to now that there will certainly be extra {hardware} kind components to come back, with out detailing what these may be. The corporate has a really lively neighborhood of practically 46,000 individuals on Discord who not solely chatter about present merchandise but additionally recommend ideas for what Nothing may construct sooner or later. At the very least considered one of these — a smartwatch — was not too long ago shared by Nothing with a touch to “watch this house.”
One other space that Pei not too long ago has been waxing lyrical about is the way forward for software program, so that’s one other space — providers and apps — the place Nothing may be seeking to do some one thing.
Armed with the brand new funding, it’ll doubtless be ramping up its expertise base in support of that. The corporate at the moment has 450 staff and solely not too long ago began to convey on software program engineers alongside its staff of {hardware} specialists.
“In simply over two years, we’ve assembled one of many strongest groups within the business and bought over 1.5 million units worldwide,” stated Pei in an announcement. “It’s clear that there’s actual demand for an modern challenger within the client tech business, and with this new spherical of financing, we’ve by no means been higher positioned to appreciate our imaginative and prescient to make tech enjoyable once more.”
The corporate’s focus and execution will likely be key for the following stage.
Highland associate Tony Zappalà, who’s main the spherical for his agency, stated in an interview that he’d been launched to the staff a few years in the past, however he declined to speculate initially.
It was earlier than the launch of its first telephone, he recalled, and “After I first met the staff I believed it was utterly loopy to launch a brand new telephone, and I used to be negatively predisposed,” he stated. “However they managed to launch and make a hit of it, promoting tons of of hundreds of items, and nice opinions.”
Traders imagine that there’s a possibility for a viable new participant alongside Apple and Samsung, the 2 that dominate smartphones, adopted by a really lengthy tail of smaller producers.
“However not everybody desires an iPhone or a Samsung machine,” Zappalà stated. “Carl’s thesis is that the smartphone market is large market, and if you may make a cool product you’ll be able to nonetheless do one thing actually good. This staff is doing that that primarily based on an fascinating connection between design, usability and relationships with customers.” He additionally identified that Pei’s background, beforehand with OnePlue, provides the corporate an enormous benefit in constructing and manufacturing {hardware}.
