- The transaction is expected to double Inseego’s revenue and give it a global reach
- Nokia will become a significant shareholder in Inseego, with a stake of about 11%
- Both companies will collaborate in joint go-to-market initiatives in 6G and wireless edge
Inseego CEO Juho Sarvikas is making good on his promise to seize new business opportunities for fixed wireless access (FWA): acquiring Nokia’s FWA CPE business.
The deal will see Nokia receiving about $20 million in stock and warrants, equating to an equity stake of about 7% in Inseego. Nokia will then make an additional $10 million investment at the close of the transaction, giving Nokia a stake of about 11% in Inseego.
Investors appeared more than pleased, shooting Inseego’s stock up more than 25%, to about $18.52. Nokia shares were up about 2%, to 12.75.
Nokia announced at its Capital Markets Day in November that the FWA business would be part of the portfolio that it was looking to sell. Sarvikas reached out to Nokia CEO Justin Hotard and discussions got underway.
Inseego to double revenue
Sarvikas, himself a former Nokia executive, said customer continuity is very important. The transaction will see Inseego doubling its revenue and giving it a global footprint.
San Diego-based Inseego made a name for itself in the mobile hotspot arena with the MiFi product line and it’s been working with mobile carriers for 30 years, including the current Big 3 in the U.S.
Sarvikas told Fierce last year that he strongly believes the enterprise FWA market opportunity is in its early stages and he anticipates growth. That remains true today.
“There’s going to be significant growth. It’s going to be a different narrative by geography... But what I like about this transaction or partnership is that now Inseego can participate globally. I did not have sales or operations capability outside of North America previously,” he told Fierce in an interview.
In addition, Inseego can participate with the entire portfolio, including mobile hotspot and both consumer and enterprise FWA.
“We’re now at a very large scale, one of the largest wireless broadband players in the industry,” he said.
Nokia as strategic partner
From Nokia’s perspective, this was about finding the right owner for its FWA business, according to Konstanty Owczarek, chief corporate development officer at Nokia, who appeared via webcast with Sarvikas this morning.
Inseego stood out for several reasons, including its deep expertise in wireless broadband and wireless edge.
“We have a shared view of where the fixed wireless access market is going,” Owczarek said. “This will allow us, together, to collaborate on the joint go-to-market, innovation initiatives in 6G, in wireless edge and to capture the opportunities in AI that will further advance the FWA business as part of Inseego.”
Inseego has about 270 employees and will be acquiring an undisclosed number of Nokia employees as part of the deal.
The deal is expected to close in the fourth quarter, after which Nokia will have a significant stake in Inseego.
“Our success will be their success and of course, we intend to make them very successful,” Sarvikas told Fierce.