Nokia buys France’s Withings for €170M to ramp up in well being tech and IoT
Nokia’s historical past as the world’s largest cell phone maker is turning into a distant reminiscence, however it’s not out of the gadget enterprise simply but. To construct out its well being know-how enterprise, the corporate immediately introduced that it has acquired Withings, makers of sensible scales, exercise trackers, and different well being devices. Withings is predicated out of France, and with Nokia in Finland, the transaction was in euros: €one hundred seventy million to be actual, or round $192 million in U.S. dollars.
The deal is predicted to shut in Q3 of this yr, with Withings turning into part of Nokia Applied sciences. It’s an honest return: Withings had raised slightly below $34 million, with buyers together with BPIFrance, Idinvest, Ventech and 360 Capital Companions.
The deal shouldn’t be solely an indication of how Nokia nonetheless very a lot believes it extra to do within the world of devices, however an indication of how the corporate goes again to its early playbook of constructing vertically built-in companies. On this case, shopping for Withings isn’t just concerning the well being trackers, blood strain screens, thermometers and different objects that buyers will purchase, however the greater enterprise of connecting them and operating a wider array of cloud-based mostly providers beneath the hood — in any other case often known as the Web of Issues.
“We have now stated persistently that digital well being was an space of strategic curiosity to Nokia, and we at the moment are taking concrete motion to faucet the chance on this giant and essential market,” stated Rajeev Suri, president & CEO of Nokia, in a press release. “With this acquisition, Nokia is strengthening its place within the Web of Issues in a means that leverages the facility of our trusted model, matches with our firm function of increasing the human prospects of the related world, and places us on the coronary heart of a really giant addressable market the place we will make a significant distinction in peoples’ lives.”
Notably, that is the first acquisition in years at Nokia that’s targeted on shopper tech: the final a number of, together with the ingestion of Alcatel-Lucent, have been about constructing out its cellular again-finish and networking companies.
It’s additionally a sensible transfer for an additional a part of Nokia’s remaining enterprise: its patents. Nokia will not be making as many new waves in cell phone patents as we speak because it did years in the past, and whereas it continues to exploit these for royalties with corporations like Apple, Withings, it says, “may even guarantee the continued renewal of Nokia Applied sciences’ world class IPR portfolio.”
Whereas IoT is a really low-margin enterprise in comparison with different digital shopper providers like cell phones, Nokia notes that healthcare is likely one of the huge alternatives, citing analysts’ forecasts of market CAGR of 37%, making it “the quickest rising well being care phase from 2015-2020.”
It’s additionally an acquisition that’s tapping into one other development: we’re dwelling longer and getting increasingly more acutely aware of our well being, and in some instances we’re not truly getting more healthy, with weight points affecting a number of our sedentary inhabitants, and different sicknesses like diabetes rising in prevalence due to wider modifications in our diets.
Withings was co-based by Eric Carreel and Cedric Hutchings in 2008, each of whom look like becoming a member of Nokia. It employs 200 individuals in France, the U.S. and Hong Kong.
“Since we began Withings, our ardour has been in empowering individuals to trace their way of life and enhance their well being and wellbeing,” stated Cédric Hutchings, CEO of Withings. “We’re excited to hitch Nokia to assist deliver our imaginative and prescient of related well being to extra individuals around the globe.”
For its half, it’s fascinating that Withings determined to promote, and to promote to a European tech big that primarily is a non-participant within the exercise monitoring/well being tech enterprise. Within the wider market, there might nonetheless be query marks over the broader potential for related units like exercise trackers. Corporations like Fitbit have been rising, however slowly. Others like Jawbone have seen their valuations slashed whereas ready for the market to actually take off.
The query now’s whether or not Withings underneath Nokia will faucet into what’s already on the market when it comes to shopper curiosity, or whether or not they have what it takes to supercharge and lead it.