With a Rumored $70 Million in Capital Investment, Cyanogen Plans to Supplant Google
For the past 18 months Cyanogen Inc has been working to develop the open source CyanogenMod Android firmware for devices including the Micromax Yu and the OnePlus One, but that’s just the start of their ambitions.
Cyanogen co-founder and CEO Kirt McMaster revealed last week that he thinks his small startup could one day offer a version of Android which was completely independent of Google, and thanks to a recent injection of capital from Microsoft and other investors his goal is less a delusion of grandeur than a bold goal.
The WSJ reports that Cyanogen Inc is in the middle of a new round of funding. Citing unnamed sources with unconfirmed story, the WSJ says:
Microsoft would be a minority investor in a roughly $70 million round of equity financing that values Cyanogen in the high hundreds of millions, one of the people said. The person said the financing round could grow with other strategic investors that have expressed interest in Cyanogen because they’re also eager to diminish Google’s control over Android. The identity of the other potential investors couldn’t be learned.
The WSJ is puzzled why MS would invest in Cyanogen Inc when it was already invested in Windows Phone 8 and Windows 10, which will be available on tablets and smartphones later this year, but this move makes perfect sense to me.As you may recall, Microsoft has previously used its patent portfolio as a club against smaller companies which made and sold Android devices. MS was frankly being a patent troll, but their real goal was to weaken a competing OS by making Android less profitable.
Given how many hundreds of millions of Android devices were sold last quarter, I’m not sure that Microsoft had much success. But I do think that Microsoft’s decision to invest in Cyanogen has basically the same goal.
And with Kirt McMaster in charge, Cyanogen is at the very least going to take Google down a peg or two. His goal:
We’re making a version of Android that is more open so we can integrate with more partners so their servicers can be tier one services, so startups working on [artificial intelligence] or other problems don’t get stuck having you have to launch a stupid little application that inevitably gets acquired by Google or Apple. These companies can thrive on non-Google Android.
As originally conceived, Android was supposed to be an open operating system, and it is – mostly. There are a number of non-Google versions of Android in use, including CyanogenMod (the original open source firmware which Cyanogen Inc is now developing as a commercial product). Independent versions of the Android already account for 37% of Android shipments world-wide in the third quarter, according to Strategy Analytics.
But the other 63% is firmly in Google’s grip, and many device makers are unhappy.
Google uses its control of key services (Google Play, Gmail, etc) as both a carrot and a stick to keep device makers in line. Google has in the past blocked smartphone makers from using open source variants of Android, and it has required them to install certain apps. These restrictions chafe, which explains why there is so much interest in Cyanogen Inc right now.
Launched in 2012, Cyanogen Inc has 80 plus employees. It had previously raised $30 million in capital. Prior investors in Cyanogen Incincluded Benchmark Capital, Redpoint Ventures, Andreessen Horowitz, and Chinese social-networking giant Tencent.
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