Carl Pei, co-founder of smartphone and hardware startup Nothing.
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Nothing, the hardware startup founded by OnePlus co-founder Carl Pei, has raised $96 million from investors in a new funding round to fuel its expansion into the U.S. and launch of new smartphones.
The London-based company has raised fresh funding in a round led by European venture capital firm Highland Europe, with participation from existing investors GV, EQT Ventures and C Capital, as well as house music supergroup Sweden’s House Mafia.
Tony Zappala, a partner at Highland Europe, led the round and will join Nothing’s board of directors, the company announced.
To date, the company has launched more than 1.5 million products. With another $96 million in the bank, the company plans to further scale the business so it can make more products and increase sales.
Nothing has launched three products so far: the Ear 1, Ear 2 and Ear Stick wireless earphones, and its first smartphone, the Nothing Phone.It plans to launch a new smartphone, the Phone 2, on July 11 that will be equipped with a processor from the US chip company Qualcomm.
The funds will be used to invest in the company’s expansion into the U.S. market, which will put it in more direct competition with U.S. tech giant Apple. Pei first revealed plans to expand in the U.S. in December 2022 in an exclusive interview with CNBC.
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In March, Pei told CNBC that the expansion was off to a good start. The company has assembled a team there and is “confident” it will make progress in launching its first phone in the US market this year.
“The product is going well,” Pei said at the time on the sidelines of Mobile World Congress in Barcelona. “The first year, we barely had any engineers. We had about three engineers. The factory did all the work. So there were a lot of things we weren’t aware of.”
At the same time, Nothing must cut costs as much as possible to ensure its survival in the current economic environment.
Pei said the company has been reviewing employee performance and letting some employees go on a case-by-case basis when they are not satisfied with their performance and company expectations.
“It was very difficult,” Pei said at the time. “Hardware is hard. Macro is hard. Our industry is hard.”
“So if someone just wants to be part of a cool company and enjoy tech company perks, then this is not the place. If you just want to tell your friends you work for a cool company, this is not the place to be. The right place. If you want to create something with the rest of us, it’s a really great opportunity.”
The environment for raising capital has been tough for start-ups, as venture capitalists tighten their belts in response to rising inflation and investors’ sour outlook on technology.
That’s because rising inflation, rising interest rates and a weakening economy have caused some sort of reset in tech stock valuations.
Meanwhile, smartphone sales have been under pressure, with global shipments falling 14% year-over-year in the first quarter of 2023, according to Counterpoint Research.
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