Sales of smartphones are dropping as manufacturers struggle with crowded markets and a challenging consumer economy. However, some are placing bets on a future where users will continue to respond favourably to innovative design and technological approaches.
Nothing, the London startup that created the “Phone” smartphone, has closed a $96 million investment. With this money, the company plans to continue growing its business and product line, beginning with its upcoming smartphone. In keeping with its moniker, the Phone (2) is scheduled to go on sale in the upcoming weeks.
In addition to former backers GV (Google Ventures), EQT Ventures, and C Capital, Highland Europe is leading the round. Additionally, the Swedish House Mafia will receive a strategic stake that is currently being used. There are no teasing features for the upcoming Phone (2), but yesterday it was revealed that it will have customizable “visual” ringtones. The electronic/house music supergroup composed one of the sound packs for the feature.
With this investment, the company has raised $250 million in total, including about $11.5 million from two rounds of crowdfunding. Nothing reveals how much it is worth. (We’re investigating and will provide an update as we find out.). Critically speaking, the round is the largest the company has ever raised. Before this, it closed a $70 million Series B in March of last year. Despite the ongoing startup investment drought and the pressures of the smartphone market’s crunch, Nothing, as we understand it, had no shortage of inbound interest. Its metrics have been a contributing factor in this, BrandSpur news brand reports.
According to people close to the company, it generated $200 million in 2022 and is already on pace to surpass that amount this year. Additionally, it has now sold 1.5 million units, which includes two different versions of its earbuds and one phone. According to what I understand, 800,000 phones have been sold, with the majority being handsets. (In contrast, Carl Pei, the CEO and Co-founder, informed us in February that the company had moved one million devices.)
According to Google Ventures’ Tom Hulme, a member of Nothing’s board in an interview: “Over the last two years, to be able to do all of that in this market, it’s a testament to what this team can achieve.”
Continuing, one of the main components of Nothing’s growth strategy will be the new Phone device, which is scheduled to launch on July 11. Due to radio band compatibility, the Phone (1) had a limited release, meaning it did not debut in the United States. That is fixed by the Phone (2), which will be available in the US market. We understand that the launch will not be in collaboration with any phone manufacturers, at least not at first.
Pei has previously informed us that there will undoubtedly be additional hardware form factors in the future for Nothing’s product roadmap, but she hasn’t specified what those might be. Although some may question whether Nothing will be able to compete with Apple’s impending Vision Pro and other initiatives in the VR and XR space, that might not be the next big thing. Nearly 46,000 members of the startup’s vibrant Discord community discuss current products and offer ideas for future projects that Nothing might develop.
Nothing recently revealed at least one of these, a smartwatch, along with a suggestion to “watch this space.”
Pei has also recently waxed poetic about the future of software. Like many others, he finds it annoying that so many apps these days seem to be made to steal user data; therefore, services and apps are other areas where Nothing might be trying to accomplish a small task. To help with that, it will probably be expanding its talent pool with the new funding. With 450 workers at the moment, the company has only lately begun to add software engineers to its staff of hardware experts.
According to Pei in a statement: “In just over two years, we’ve assembled one of the strongest teams in the industry and sold over 1.5 million devices worldwide. It’s clear that there’s real demand for an innovative challenger in the consumer tech industry, and with this new round of financing, we’ve never been better positioned to realise our vision to make tech fun again.”
In an interview, Highland partner Tony Zappalà, who is spearheading the round for his company, stated that he had been introduced to the team a few years prior, but he initially turned down an investment. He recalled that it was before the introduction of its first phone, and revealed: “When I first met the team I thought it was completely crazy to launch a new phone, and I was negatively predisposed. But they managed to launch and make a success of it, selling hundreds of thousands of units, and great reviews.”
Alongside Apple and Samsung, the two companies that currently control the smartphone market, investors see a chance for a strong new player, followed by a long tail of smaller manufacturers.
