There is this news about the current situation, but it’s behind a paywall. Could anyone with an access post the full article?
Thank you in advance
…and please translate to English.
The article can be read with the Firefox Addon Bypass Firewalls Clean.
This is the DeepL translation, I added some markups from the original article:
Jolla is trying to get rid of its Russian owners - CEO: “If they don’t sell their stake, there will soon be nothing to sell”
Jolla, a startup company founded by former Nokia engineers, is again looking for a new direction and buyers for the shares of its Russian owners. According to CEO Sami Pienimäki, the exit from Russia started earlier, when the ownership base made potential financiers nervous.
Finnish software company Jolla is seeking to shed its Russian owners this spring.
“Russian ownership must be completely removed from our structure. Otherwise, we will not continue to do business,” says Sami Pienimäki, CEO of Jolla, to Talouselämt.
According to Pienimäki, discussions on the exit are already well advanced.
Jolla has been cooperating with Russian entities since 2016. The company’s major owner is the Russian telecom operator Rostelecom, which in turn is owned by the Russian state.
Russia is a saviour
For Jolla, a start-up company founded by former Nokia engineers, Russian owners and partners were once the salvation after earlier difficulties.
Jolla first licensed the Sailfish mobile operating system it had developed to the Russian company Open Mobile Platform, founded by Russian businessman Grigory Berezkin. Rostelecom bought the company and Berezkin’s stake in Jolla in 2018.
Russian partners have been developing a Russian operating system on top of Jolla’s Sailfish for use by public authorities and state-owned companies.
Pienimäki is keen to stress that this was not an application built for military use.
“In practice, we are talking about smartphones with their Aurora-based operating system instead of Android. Employees and civil servants of state-owned companies have been using it.”
CEO: The downturn started already last year
According to Pienimäki, Jolla has been winding down its Russian business since 2020. Jolla has terminated the software license and the last maintenance work was done in November 2021, according to Pienimäki.
“They are independent of our software platform. They have an independent team that now maintains and develops the application.”
By them, Pienimäki means Rostelecom.
Pienimäki says Jolla’s turnover from Russia already fell to less than €1 million last year, down from around €3.6 million the year before. In 2021, Pienimäki says, Jolla’s turnover will total around EUR 3.5 million, according to unaudited data.
Now, according to Pienimäki, there is no more revenue from Russia.
Direct feedback from investors
According to Pienimäki, the cooperation with the Russians was originally intended to be cut off before long because Rostelecom wanted to build an independent operating system. The break-up was given a new impetus by the financing negotiations last year.
Jolla raised a EUR 20 million round of financing from investors. According to Pienimäki, the negotiations progressed well and discussions were held with investors from Finland, Germany, France, Switzerland and other countries. However, the Russian owner made Western investors nervous.
“The feedback from a large group of investors was quite direct: ‘We have a great deal, but first we have to get rid of the Russian owners,’” says Pienimäki.
Rostelecom, through a holding company, owns 31.7% of Jolla, according to Pienimäki. Russian private investors have held about 23%.
“Rostelecom’s ownership has always been strictly below 50 percent,” he assures.
According to Pienimäki, Rostelecom has been willing to divest its stake, as have other Russian investors. According to him, discussions have taken place and solutions have been sought in good cooperation.
“They can see that if they don’t sell their stake, there will soon be nothing to sell.”
Rostelecom representative left the board
Two of the three Russian members of Jolla’s board have already resigned.
In March 2022, Alexander Kolesnikov of Rostelecom and Alexander Ayvazov, CEO of the Russian investment company Titanum Investements, left the Jolla board.
“Their departure is an indication to other investors that they do not control the company, even though the share deal has not yet been concluded,” says Pienimäki.
Boris Krasnovsky, a Russian investor, will continue to serve on Jolla’s board. However, according to Mr Pienimäki, he will represent Russian shareholders on the board until the shares are sold.
The board of Jolla also includes Pienimäki himself, Alessandro Mondini Branzi, an Italian who worked at Nokia in the 2000s, and the newest member, Mercedes-Benz representative and software manager Pedro Monteiro. According to Pienimäki, Monteiro will replace Gregor Zetschen, formerly of Mercedes-Benz, on the board.
Samuli Simojoki, a partner at law firm Borenius, who has been chairman of Jolla’s board, has also left his position in March.
“He made his own decision,” says Pienimäki.
Simojoki did not want to comment to Talouseläminen.
“A solution will be found - perhaps by domestic forces”
Pienimäki says the aim is for the Russian owners to sell their shares by the end of May.
“I am confident that a solution will be found, perhaps even by domestic forces. We are in advanced discussions about the share arrangement.”
Pienimäki would not comment further on the discussions or the parties with whom they have been held. The new owner will also bring new funding to the company.
“The world changed overnight”
Jolla’s operating result bounced back into the black in 2020, but Pienimäki says last year was another loss-making year. Turnover was also down from the previous year, but Pienimäki says this year’s turnover looks promising.
In addition to mobile operating systems, Jolla is now developing technology for the automotive industry. Jolla is working on a software partnership with MBition, a software company belonging to the Mercedes-Benz Group.
“Last year, the automotive sector accounted for about 50 percent of our turnover. This year, the share is about 70 percent.”
Jolla employs about 50 people. According to Pienimäki, Jolla has laid off staff this year due to the situation in Russia.
What thoughts does the past cooperation with the Russians now raise?
“Many people up to the top level of government have had to admit that the world changed overnight. Europe had big projects with the Russians, and European democracy wanted to believe in cooperation. That image was shattered,” says Pienimäki.
Translated with www.DeepL.com/Translator (free version)