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KaiOS, a feature phone platform startup, raises $3.4 million to focus on growth in Africa.


Finnfund, an impact investor based in Finland, gave $3.4 million to KaiOS, a Hong Kong-based company that makes feature phones. KaiOS has gotten money from prominent investors like Google and TCL.

Finnfund’s funding comes from a convertible note, which can be converted into shares in a future fundraising round.

Finnfund and KaiOS say that the money raised today will help KaiOS grow its business in sub-Saharan Africa, a big market for low-end, cheap electronics.

The investor is especially interested in Africa and has helped several businesses there, such as the financial startup Jumo and the food supply chain startup Twiga.

In a statement, Codeville said that this funding could help KaiOS enter new markets in Sub-Saharan Africa. “We’re delighted to be collaborating with a financial backer like Finnfund, which recognises how urgently the transition of Africa’s economy to one based on eCommerce must be accelerated.

The first few years of KaiOS were full of great hope. It began as a split off of Firefox OS, an attempt by Mozilla and its partners to make a smartphone operating system that could compete with Google’s Android and Apple’s iOS.

The KaiOS team saw an opportunity in developing economies to focus on the lower end of the consumer market and combine research and development for these customers on a single platform for advanced phones.

Others agreed, and KaiOS quickly got OEMs like Nokia and software partners to join its ecosystem to make it bigger.

Google became a strategic partner of KaiOS and put tens of millions of dollars into the company to ensure it would still be a big player in the feature phone market even as Android grew in popularity.

In 2019, KaiOS said that they had shipped about 100 million devices with their OS. IDC thought that 500 million feature phones would be sent every year over the next five years.

Currently, the company only says that “about 170 million” KaiOS-powered devices have been shipped, and there are only about 100 million active users on the market.

Estimates show that KaiOS has a 0.07 per cent mobile market share. iOS has 28.3% of the market, while Android, which runs on a wide range of devices that are getting cheaper and cheaper, has just over 71%.

In addition to having a small market share, the number of feature phones sold is decreasing. India is the leader in the market for feature phones right now. China, Pakistan, Bangladesh.

But the fact that Nigeria is the only country in Africa to be in the top five markets for feature phones shows that there is still room for growth in the rest of the continent, and Finnfund is working to take advantage of this.

“The investment in KaiOS is an important step toward connecting the unconnected,” said Kuutti Kilpelainen, an investment manager at Finnfund.

KaiOS has demonstrated its capacity to solve the affordability issue, and we are happy to join the group of investors who all share the same ambitious aim of reducing the digital divide.”




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