London-based smartphone startup Nothing Tech has raised a $200m Series C, promising to disrupt the market with a new generation of AI-native devices.
Nothing is a rare example of a startup making a successful bid to disrupt the consumer electronics market, which is dominated by a handful of Big Tech players including Apple and Samsung.
Tiger Global led the round, which sees Nothing hit a valuation of $1.3bn. Existing investors GV, Highland Europe, EQT Ventures, Latitude also participated in the round, taking the startup’s total funding to over $400m.
Founded in 2020, Nothing makes smartphones, smart watches and headphones, alongside the operating systems that power them. In the past four years, the company says it’s shipped millions of devices and crossed $1bn in sales at the start of the year.
“This milestone marks the start of our next phase: from being the only independent smartphone company to emerge in the last decade, towards building an AI-native platform in which hardware and software converge into a single intelligent system,” CEO Carl Pei said in a statement.
Much of the AI fanfare so far has surrounded the data and software layer, with hype around large language models (LLMs) booming since late 2022, when OpenAI released ChatGPT, which was built using the technology.
Since then, industry experts have speculated as to how LLMs might be best incorporated into physical devices. OpenAI made headlines in May when it announced a $6.5bn acquisition of hardware design startup Io, as it looks to develop a new generation of AI-native devices.
While the “smartphone will remain one of the most important devices in the AI era”, consumer hardware must “reinvent itself”, says Pei. “We see a future where operating systems are significantly different from the ones today.”
Systems will become more personalised, interfaces will adapt and AI agents will execute tasks on behalf of users, he says.
“A new class of AI-native devices will emerge. We have been hard at work imagining what this future could look like, and can’t wait to launch some of our first AI-native devices next year.”
Nothing also said that its operating system, which is built on top of Android, will be used in smart glasses, humanoid robots and electric vehicles in the future.
