Carl Pei’s smartphone startup Nothing raises $96 million from investors for U.S. expansion

Nothing, the {hardware} startup from OnePlus co-founder Carl Pei, raised $96 million from traders in a brand new spherical of funding to gas an enlargement of its business into the U.S. and the launch of its new smartphone.

The London-based firm raised the contemporary money in an funding spherical led by European enterprise capital agency Highland Europe, with present traders GV, EQT Ventures, and C Capital additionally investing, together with home music supergroup Swedish House Mafia.

Tony Zappala, a associate at Highland Europe, led the spherical and can be becoming a member of Nothing’s board, the corporate introduced.

Nothing stated it has now launched greater than 1.5 million merchandise to this point. With one other $96 million within the financial institution, the corporate plans to scale its operations additional in order that it could possibly produce extra merchandise and ramp up gross sales.

Nothing has launched three merchandise to this point — the Ear 1, Ear 2 and Ear Stick wi-fi earbuds, and the Nothing Phone, its first smartphone. It is planning to launch a brand new smartphone, the Phone 2, on July 11, which can include a processor from U.S. chip firm Qualcomm.

The funds can be used to put money into the corporate’s enlargement into the U.S. market, which might put it in additional direct competitors with U.S. tech big Apple. Pei first disclosed plans to develop its business within the U.S. in December 2022, in an unique interview with CNBC.

In March, Pei advised CNBC the enlargement is already getting off to an excellent begin. The agency has a crew up and operating there, and feels “confident” it would make headway in launching its first cellphone within the U.S. market this yr.

“The product is progressing very well,” Pei stated on the time, on the sidelines of Mobile World Congress in Barcelona. “In year one, we barely had any engineers. We had like three engineers. And the factory did all the work. So there were a lot of things that we couldn’t realize.”

At the identical time, Nothing has needed to minimize prices the place it could possibly to make sure its survival within the present financial atmosphere.

Pei stated the corporate has been reviewing staff’ efficiency and letting some particular person staffers go on a case-by-case foundation when sad with how they’ve carried out versus its expectations.

“It’s very hard,” Pei stated on the time. “Hardware is hard. The macro is hard. Our industry is hard.”

“So if there’s people who just want to be a part of a cool company and enjoy tech company perks it’s not the right place. It’s not a place to come if you just want to tell your friends you’re working at a cool company. It’s really if you want to build something together with the rest of us, it’s a really good opportunity.”

It’s been a troublesome atmosphere for startups to lift capital, as enterprise capitalists have tightened their belts in response to rising inflation and a souring outlook from traders in the case of expertise

That’s as rising inflation, increased rates of interest, and a softer financial system have led to one thing of a reset in tech valuations.

Meanwhile, smartphone gross sales have been beneath strain, with international shipments falling 14% year-over-year within the first quarter of 2023, in response to Counterpoint Research.

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