New York: Nokia Corp. is more than 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 India and China.
“We’ve been investing in companies globally, but we need to get even more feet on the ground in China and India,” said Rick Simonson, Nokia’s chief financial officer.
Menlo Park, California-based Nokia Growth Partners was set up in 2004 to directly manage $100 million of Nokia’s money. Its investments have included Bitboys, a Finnish developer of graphics chips that was bought by ATI in 2006 for $44.5 million, and Global Locate, a US maker of GPS chips that was bought by Broadcom Corp. for at least $146 million last year.
“We’ve had very good success with this model early on,” Simonson said. “The financial performance is working as well or better than we expected.”
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.
Venture funds have become a standard accessory for companies in the cell phone arena, though the approaches vary.
Qualcomm Inc. has a venture fund with a broad portfolio, much like Nokia Growth Partners. Research in Motion Ltd., which makes the BlackBerry, announced in May that it had set up a $150 million fund with outside partners to invest in companies creating software for BlackBerrys and other mobile devices. In March, Apple Inc. said it would set up a $100 million “iFund” for the development of iPhone and iPod Touch applications.