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KaiOS raises $3.4 million targets in Sub-Saharan Africa for its premium smartphone

KaiOS, a feature phone startup headquartered in Hong Kong, has received $3.4 million from Finnfund, an impact investor based in Finland. KaiOS has previously received funding from major investors such as Google and TCL.

Finnfund funding is provided in the form of convertible notes, which can be converted into stock in a possible future fund-raising round.

According to Finnfund and KaiOS, the funds raised today will help KaiOS expand its operations in sub-Saharan Africa, an important market for low-cost and inexpensive electronics.

The investor has a particular interest in Africa and has directly backed several companies there, including financial firm Jumo and food supply chain startup Twiga.

In a statement, Codeville claimed that KaiOS may enter new markets in sub-Saharan Africa thanks to this funding. “We are delighted to collaborate with an investor like Finnfund who understands the importance of accelerating digitization in Africa.”

The early years of KaiOS were wiped out on wings of great promise. It began as a fork of Firefox OS, an unsuccessful attempt by Mozilla and its partners to create a viable alternative to Google’s Android and iOS operating systems for smartphones.

In developing economies, the KaiOS team has identified an opportunity to focus on the lower end of the consumer market and combine research and development directed at these customers into a single platform for high-end phones.

Others were of the same opinion, and KaiOS quickly attracted OEMs such as Nokia and software partners to expand its ecosystem.

Even Google, in hedging its bets, became a strategic partner of KaiOS and invested tens of millions of dollars in the business in order to ensure that it played a significant role in the feature phone segment even as Android gained market share.

In 2019, KaiOS reported that nearly 100 million devices with their operating system had shipped. IDC estimated that over the next five years, 500 million feature phones would be shipped annually.

Right now, the company only reports that “about 170 million” devices running KaiOS have shipped, with an active market fewer number of about 100 million.

According to estimates, KaiOS currently has a market share of 0.07% of the entire mobile phone market. By comparison, iOS has a market share of 28.3%, while Android, which has been powering an ever-cheaper variety of devices, has just over 71%.

The overall volume of feature phone sales is declining, as well as their limited market share. India currently holds a dominant position in the feature phone market, followed by China, Pakistan, Bangladesh and then Pakistan.

However, the fact that Nigeria, the only country in Africa to rank in the top five markets for feature phones, suggests there is still room for growth in the rest of the continent, and Finnfund is working to capitalize on that.

Take Techbuild

A weak segment of the mobile market, feature phones, came under even greater pressure as smartphone shipments declined in what was a difficult year for mobile phones.

Feature phone operating system KaiOS, one of the players in this market, is receiving a small financial boost today that speaks to that pressure while also giving it an opportunity to expand into what remains a niche market niche: providing poorer consumers in developing economies in sub-Saharan Africa with less expensive hardware. But it is still useful and practical in the end.

KaiOS’s selling point is that it’s an inexpensive alternative for phone manufacturers looking to create feature phones that can compete with entry-level smartphones.

With apps and other features popular in Internet-enabled phones, KaiOS currently announces 41 models of smartphones running its operating system, with the most affordable models costing around $10.

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