Telstra pumps $18m into US startup Kony



blog Telstra has been talking up its investment arm for a while now, and it’s good to see the company start to make some strategic investments. It’s just a pity that it’s not focusing more on Australia. The telco announced overnight that it would pump some $18.3 million into US application platform developer Kony. Telstra’s announcement:

Telstra has made a $US18.3 million strategic investment in Kony Solutions, Inc., – a leading U.S. mobile and multi-channel application platform provider.

Telstra Ventures Managing Director Mark Sherman said as well as taking a stake in the company, Telstra would offer Kony’s innovative pre-built applications and applications platform to business and enterprise customers. Mr Sherman said the move aligned to Telstra’s strategy of developing new growth businesses and builds capability in Telstra’s domestic mobiles portfolio.

“Kony offers business and enterprise customers a library of innovative pre-built mobile applications including the Kony Platform that enables customers to write their own applications and deploy them across multiple channels simply and at low cost,” Mr Sherman said. “For Telstra this is a win-win – we are investing in an innovative company and adding immediate value by being able to offer Kony’s products to our business and enterprise customers.

“Kony’s suite of applications complements our existing mobility portfolio and enhances our mobile and cloud services offering for customers. Workforces are becoming increasingly mobile so the ability to deploy these types of apps across devices and operating systems is fast becoming a non-negotiable business requirement. Kony’s solutions will also help our business and enterprise customers create, quickly deploy and manage applications for their smartphone and tablet fleets.”

Kony’s CEO Raj Koneru said Telstra’s investment would help Kony expand into the Asia Pacific region more quickly and enable the company to leverage Telstra’s well established customer relationships.

“FY2014 is shaping up to be a huge year for us,” said Raj Koneru, Kony’s founder and CEO. “Telstra’s investment will enable us to further expand into the important Asia Pacific region, leverage their well-established customer channels, continue our cloud product development, and penetrate new global geographies to further solidify our domination in the mobile apps marketplace.”

Mr Sherman said Telstra Ventures has a three to five year plan to build an exciting investment portfolio of 20-30 companies. “Our investments will be among the best emerging companies in the world each at varying stages of development,” he said. “We are already seeing some good success with investments such as Mandoe Media and Ooyala. Our team will continue to look for investment opportunities which fill gaps or accentuate opportunities for Telstra,” Mr Sherman said.

The pattern we’re seeing here from Telstra is pretty clear. The company is not a standard investment organisation such as an angel investor or venture capital firm, and so it’s not interested in purely financial arrangements as such firms would be. Instead, Telstra is looking to take a strategic stake in startups whose technologies it can help take to market through its own existing channels — and those startups don’t have to be located in Australia. Personally I don’t usually agree with this approach, as I feel it often skews the target company’s strategy unnecessarily towards the investor’s aims and leads to them not being as independent as they could be, but I’m sure Kony will feel pretty comfortable being under the wing of as large a company as Telstra in the short-term. I guess we’ll find out in a few years how productive the relationship will be.

Interestingly, Kony recently presented at CeBIT Australia. I wonder whether this had anything to do with Telstra’s investment — perhaps that’s where the initial contact was made? It’s also worth noting that Kony has previously taken several investment rounds — Telstra is not the first investor in here, by any measure.

Image credit: Kony


  1. Would be great to see Telstra take the lead here and do a deal with Jolla.
    investment in Jolla Oy would provide a great opportunity to enhanve the existing local developer community and provide support for some much needed diversity in the Mobile space.

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