Friday, August 1, 2008

Nokia to Double Direct Venture Funds in China and India

Nokia Corp. has been doubling the size of its direct venture investment fund with an injection of $150 million, with a view to putting some of the money to use in China and India.

According to Rick Simonson, Nokia's chief financial officer, Nokia has been investing in companies globally. However, Nokia need to get even more feet on the ground in China and India. He added, Nokia had very good success with this model early on and the financial performance has been working as well or better than the company has expected.

Venture funds have become a standard accessory for companies in the cell phone field, though the approaches vary. Apart from seeking a financial return, the fund hunts for startups with technologies that are useful to Nokia. Some areas of focus have included mobile payments and camera technology.

Menlo Park, California-based Nokia Growth Partners was set up in 2004 to manage directly $100 million of Nokia's money. Its investments have included Global Locate, a U.S. maker of GPS chips that was bought by Broadcom Corp. for at least $146 million last year, and Bitboys, a Finnish developer of graphics chips that was bought by ATI in 2006 for $44.5 million.

In March, Apple Inc. said it would set up a $100 million "iFund" for the development of iPhone and iPod Touch applications. On the other hand, Qualcomm Inc. has a venture fund with a broad portfolio, much like Nokia Growth Partners. Research in Motion Ltd. that makes the BlackBerry, announced in May that the company had set up a $150 million fund with outside partners to invest in companies creating software for BlackBerrys and other mobile devices.

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