Best of 2012: Funding and Exits

Posted on Dec 17 2012 - 12:30pm by Editorial Staff

2012 has been quite an exciting year in the world of technology. Battles were fought, technology was taken to a new height, stakes were even higher and some companies felt the pinch of not being innovative enough.

Apple

Apple

We saw Apple and Android devices fight for market share; we saw a host of smartphones and tablets being launched to entice customers, while social media giant Facebook went public to raise money. But behind these public scenes, all tech companies have been busy planning their strategies for the future. Mergers, acquisitions, sales, investments, exits, lay-offs, the tech world has seen it all this year. We bring to you the best of Funding & Exits of 2012.

Fighting a bitter battle in the mobile market and also in the court of law, did not stop either Apple or Samsung from heavily investing in the future. Apple bolstered its production facilities as well as unveiled investments plans in the US. Samsung started the year with investment promises of around $41 billion dollars. In view of increasing global demand for its products, Samsung primarily focussed on increasing its global production capabilities. Search giant, Google, can no longer be ignored in this discussion thanks to its $12.5 billion acquisition of Motorola, which should enable the telephone company to revive itself.

On the other hand, social media favourite, Facebook, was looking to raise money. It took the public route to do so, but not all tech companies can go public. The lesser known ones such as Heckyl, BigIndianWedding.com, Takeaway.com, Bla Bla Car and mTaxi, are a handful select companies that secured funding for their future endeavours from private sources. Most of these companies are growing up, so their requirements aren’t too many. However, corporate big houses such as Sharp, Olympus, etc. need much more money to set their business back in order. Companies such as Intel and Qualcomm have come to Sharp’s rescue with a $378 million purse while Sony is helping Olympus with a $623 million investment, but a lot still needs to be done.

Nokia

Nokia

Similar is the fate of Nokia, the Finnish mobile maker, who despite selling millions of units of its latest offering Lumia, have been posting losses every quarter. In an effort, to restructure its operations, Nokia has raised $1.2 billion. The company has closed distribution centres in China, offices in Brisbane and even projects like Nokia Money in India. But Microsoft, who’s Windows Phone OS is one of the major reasons, behind Lumia’s popularity, is investing in the Apps for its OS.

Investments have poured into Brazil, this year, with tech players such as Lenovo, who are trying to begin operations and even CISCO, who have planned a $570 million innovation centre in the fast developing country. Intel, on the other hand, has preferred to show faith in universities, to drive its innovation.  The chip making company has also pledged $4.1 billion towards next generation semi-conductor research.  With so many investments from the private sectors, the Governments are also supportive in major countries. The US government has funded a supercomputing grant for AMDsupported a ‘Big-data’ initiative and is also preparing to fund a project for development of a self-healing cloud network, while the Indian government has approved a $3.1 billion project to boost its cyber defence.

Interestingly, companies and individuals have looked beyond the tech world and further than their commercial interests while making investment decisions in this year. AT&T, for example, has invested $3.8 million in developing education based video games and pledged another $250 million on education over the next five years, while Google supported its data centres with cleaner energies coming from its wind and solar power investments which totalled $915 million so far. Following traits of entrepreneur turned philanthropist Bill Gates, Microsoft co-founder, Paul Allen, donated $300 million towards brain research. Former Oracle CFO, Jeff Henley, also gifted $50 million to University of California for studies on energy efficiency. Gauging by the extent of investments and philanthropy, the tech world seems to be in the midst of a Golden Era. But all is not well. Top executives have left major companies in search of greener pastures or as part of company restructures.

Yahoo co-founder, Jerry Yang made the headlines, when he decided to leave the company he founded 17 years ago, soon after the announcement of new CEO, Scott Thompson. Other top management including EMEA head Rice Riley too stepped down in quick succession, while Yahoo Labs Head, Prabhakar Raghavan joined rival Google. Chief Product Head Blake Irving quit the company due to the job cuts imposed by the new management as Yahoo looked to resizing its business after spending $94 million to quit business in South Korea. Even Taiwanese smartphone manufacturer, HTC pulled the plug on its South Korean and Brazilian businesses after facing stiff competition from LG, Samsung and Nokia. Struggling Nokia too had its fair share of exits, with VP Robert Anderson leaving the company after 27 years of service and GM Jorma Ollila too left the company he joined in 1985.

RIM

RIM

After facing heat for over a year, co-CEOs of RIM (Research In Motion), Jim Balsillie and Mike Lazardis finally quit their posts, making way for Thortsen Heins. Global sales head, Patrick Spence too left after serving the company for 14 years after falling sales. RIMs investment of $100 million in promoting a developer community for its Blackberry services, might just falsify the adage, ‘Better late than never’. Even the prosperous Microsoft saw its Windows Phone developer Bradon Watson leave for Amazon, and Xbox Policy director Stephen Toulouse deciding to quit after 18 years at the company. Windows Live President Steven Sinofsky too resigned at short notice. Social game developers, Zynga, too saw top brass leaving the company in 2012.

As always, there is more to look forward to in the coming year. Work is expected to start on the fibre cables between US and New Zealand as well as the 10,000 km long Asian Undersea Cable project that will bring better internet experience for users in Asian countries.  Orange and T-Mobile’s joint venture, Everything Everywhere, will roll out 4G LTE services for its users in 16 cities in the UK by Christmas while exclusively bringing Nokia’s Lumia 920 to the UK.  With its $1.6 billion investment in cloud network in place, Baidu is providing free 15GB of cloud storage space to all Android users who use Qualcomm’s Snapdragon processors.  And you can expect more engaging Apps and updates in the coming year, after Google’s announcement of its $300 million investment for start-ups to encourage development of interesting and ground-breaking tools.

All in all it was a good run for technology in 2012. Since the bar of technical advancements have been raised so high this year it will be interesting to see how tech giants challenge themselves to take innovation and originality to a new high in 2013.

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Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.