Cyanogen close to raising $110M at a valuation of $500M or more, Microsoft will not invest
Cyanogen Said to Raise $110 Million — (Bloomberg) — Cyanogen Inc. is close to an agreement on a new $110 million round of financing, people with knowledge of the matter said …
Context & Ripple Effects
Cyanogen's fundraise has been a moving target: in late January, the Wall Street Journal reported its round would include Microsoft as a minority investor, and this week Bloomberg puts the round near $110M at a $500M-plus valuation — with Microsoft now saying it will not participate. The company's pitch is an Android fork built to run without Google apps, with a first Cyanogen OS phone from Blu in the pipeline per its own origin-story profile.
The cap-table drama resolves within days of this report: the closed round comes in at $80M, backed by Twitter, Telefonica and Rupert Murdoch rather than Microsoft — yet Microsoft keeps working with Cyanogen anyway, going on to deeply integrate Cortana into Cyanogen OS by September.
First-order effects
- Cyanogen closes its growth round without its most prominent rumored strategic backer, swapping a Microsoft check for money from Twitter, Telefonica and Rupert Murdoch at a reported $500M-plus valuation.
- Microsoft forgoes equity exposure to an Android fork while retaining commercial leverage over it through the Cortana integration work already underway.
Second-order effects
- Google faces a funded rival shipping phones — Blu's upcoming device — that ship without its apps, making app-distribution independence the differentiator Cyanogen must prove at scale.
- Other strategics weighing Android-fork bets can now partner without owning stakes, following Microsoft's template of integration-first, equity-later.
Third-order effects
- If the pattern holds, Android fragmentation capital shifts from platform owners to independent OS vendors whose value rests on distribution deals and services partners rather than any single investor — leaving valuations exposed if those partnerships wobble.
The trend: Android fork startups are scaling up on anti-Google positioning while courting big-platform partners like Microsoft for services rather than balance-sheet backing.