When Yota Devices burst on to the international tech scene three years ago it wowed us all with a unique dual-screen smartphone that combined an LCD screen with an E-ink screen.
And now the fun ride is over. Engadget, Liliputing, Teleread, and other sites are reporting the news that Yota Devices has picked up a new investor (Edit: to be clear, Engadget does call this an acquisition).
What they got right was the fact that Hong Kong-based investment company REX Global was buying a 65% stake in Yota Devices.
What they missed is that Crunchbase describes this as a $100 million funding round, and they also missed the buy options that REX Global secured on the remaining shares of Yota Devices.
Here's the fun part of this deal: REX Global now owns two-thirds of Yota Devices, but they have also options to acquire the remaining 35% of the company from Yota's old parent company and from the other investor, MTH. (See the announcement PDF for more details.)
This isn't a new investor buying into Yota Devices; this is a sale disguised as an investment in the hopes that no one would notice that Yota Devices is only worth $150 million.
I know that some are spinning this as a sign that Yota Devices now has the investment capital to succeed, but my take is that this sale tells us that Yota Devices' flagship product, the Yotaphone, is a failure.
And given its history, that is no surprise.
After three years of hype, two product launches, and a failed US launch, the Yotaphone has not managed to sell significant numbers nor has it picked up any telecom partners. It has remained an expensive and difficult to acquire niche product which costs about as much as an iPhone.
If that had been a successful product from a thriving company then REX Global would be taking a smaller share for its $50 million. They would not be buying the company, and Yota Devices' parent company would not have been interested in selling.
P.S. I know that Yota Devices has a contract with ZTE to make the third-gen Yotaphone in China (this was even mentioned at the press event, or so I'm told), but I frankly don't see that happening now.