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Cyanogen Tapping Tech Giants to Build War Chest for a Non-Google Android

Cyanogen attempts to line up powerful allies to forge an alternative to Google's version of Android.


Cyanogen, the startup seeking to offer a version of Android stripped of Google services, has sought funding from a wide range of technology companies for its next round of financing.

The company has talked to a broad range of companies that includes Amazon and Microsoft, people familiar with the discussions told Re/code. Cyanogen is hoping to appeal to strategic investors seeking a legitimate alternative to Google’s version of the Android mobile operating system. For this same reason, some potential investors have backed off for fear of reprisal from Google.

Google develops Android and releases the core version of the software under an open source license. However, those that want to use any of Google’s services — YouTube, Gmail, Chrome or the Google Play store — have to agree to use all of them, in addition to prominent placement of those apps on the home screen. Cyanogen’s vision is a more open version of Android that could come bundled with services from other companies. Open source versions of Android have made inroads in China, while Amazon has also used the open source version to power its Kindle Fire line of tablets.

Cyanogen is currently looking to raise a Series C round that would value the company at hundreds of millions of dollars, up from a valuation of around $100 million in its prior financing round, sources said.

Microsoft is seen as a likely investor, although it has not finalized a deal, and Amazon is less likely to play a part in this round, one source said. Cyanogen declined to comment on its fundraising efforts, as did representatives of Microsoft and Amazon. The Wall Street Journal reported that Microsoft would invest in a roughly $70 million financing round for Cyanogen. Sources say that figure is in the ballpark, but could vary depending on which strategic investors end up taking part.

This is not the first time Microsoft has explored trying to use Android for its own purposes. The company inherited a product as part of its Nokia deal, the Nokia X, which was based on open source Android but used Microsoft’s services in place of those from Google. It updated the product once after the deal closed, but then scrapped Nokia X as part of a series of cutbacks last year.

Beyond who ends up signing up for the round, Cyanogen’s valuation is significant, especially for a company that has yet to show how it can make significant revenue from its efforts. As with Google’s flavor of Android, the core of Cyanogen’s offering — CyanogenMod — is free and open source. Cyanogen the company, meanwhile, could make money by bundling other services and software on top of the open source core.

In theory, it could put together a flavor of Android that bundled together services from, say, Amazon, Facebook and Microsoft, in much the same way the Google version of Android bundles YouTube, Chrome, Gmail and the Google Play store, among other services.

The company’s most significant deal is one to provide its software on phones sold by India’s Micromax. It has also made a number of high-profile hires in the last year as it expands both its technical and business ranks.

Cyanogen has raised more than $30 million, having raised $23 million in a Series B round that closed in December 2013; it was led by Andreessen Horowitz and included Tencent, Benchmark and Redpoint. Benchmark and Redpoint were part of Cyanogen’s $7 million Series A round that closed in April 2013.

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