Essential Raises $300 Million from Amazon, Tencent, Foxconn and Lead ATV

Stories were circulating recently about problems at former Android founder Andy Rubin’s Essential startup. Android Authority reported that three senior executives has left in just a month. “In the first half of [July], Essential lost two of its high-ranked employees — VP of marketing Brian Wallace and head of communication Andy Fouché…It was revealed that another top talent has left Rubin’s company. Liron Damir, former head of UX at Essential, has taken a new role at Google.”

The article went on to discuss what appeared to be shipment delays for the much hyped Essential Phone. This combination of events fueled speculation at Android Authority and elsewhere was that all was not well at Essential. That may still be true, but some positive news has appeared for the company that seeks to upset the smartphone duopoly of Apple and Samsung. Essential confirmed it had raised $300 million dollars and we now know who provided the money.

ATV, Redpoint, Amazon, Foxconn and Tencent Invest

Access Technology Ventures led the Series B round and Redpoint, which participated in the Series A, also added to its investment. More interesting is the fact that the Amazon Alexa Fund along with China’s Tencent and Foxconn made strategic investments. The presence of the Alexa Fund is interesting because Amazon has been actively courting smartphone manufacturers to include the Alexa voice assistant into their hardware. This has not been easy because Apple and Samsung have their own competing voice assistants and Google Assistant is already integrated into Android OS.

Amazon Wants More Alexa Presence on Mobile

Amazon wants a home for Alexa on as many smartphones as possible. HTC and Huawei have both added Alexa alongside Google Assistant, but Amazon has a long way to go to have significant embedded presence on smartphones. If Essential Phone is a big hit, Amazon could have a better foundation to start from. Many recall that Amazon has wanted a smartphone platform for some time, but the Fire Phone failed to capture consumer affection and was canceled. A successful Essential Phone could be both a platform partner and potential future acquisition candidate for Amazon.

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Amazon may also be angling to get Alexa embedded into the forthcoming Essential Home which is designed as an Echo rival. The company has an aggressive strategy aimed at getting Alexa embedded into third party devices and picking off another smart speaker device like Essential Home would be aligned with that objective. Just in case there was any confusion about whether Alexa will at least have some presence on the phone, Alexa Fund director Paul Bernard said in a statement:

Essential Products has a compelling vision and roadmap for connected devices that integrates voice technology in novel ways…We are excited to see Alexa become part of that vision where interacting with technology is simple, helpful and creates an interface that others can build on and innovate.

Rubin Claims Shipment Announcement for Next Week

In addition, Rubin hopes to put to rest rumors of production problems facing Essential Phone. He tweeted earlier today:

So, maybe we will see the phone ship next week or maybe we will be told when it may ship. Either way, the company is planting a flag and confirming that the device is coming, will be unlocked for use with multiple carriers and have an entry-level price of $699. It will be available for purchase through Sprint in the U.S. and Telus in Canada along with, Best Buy and Essential Phone will no doubt be overshadowed by the forthcoming iPhone 8, but it is good to see excitement around a market that has settled into uninspiring, incremental innovation.

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Startup Essential Raises $300 Million