Chinese wireless value-added services company KongZhong Corporation today closed the round of financing with Nokia Growth Partners that gave the wayward Chinese mobile firm approximately USD6.8 million in 5-year convertible senior notes.
"I'm truly pleased to welcome Nokia Growth Partner's investment in KongZhong. As we prepare for 3G in the China mobile market, we are seeking to enhance our strong existing mobile operator channels with equally powerful non-operator channels," stated Wang Leilei, CEO of KongZhong, a month ago.
Nokia Growth Partners also received a warrant to purchase an additional 2.0 million American Depositary Shares at USD5.00 per ADS, exercisable within five years.
KongZhong has been having problems finding a fully profitable business model for some time. The company announced that revenues for fourth quarter of 2008 exceeded guidance, with total revenues increasing 34% year-over-year and 7% quarter-over-quarter to USD26.74 million, but net income was only USD0.52 million. The USD0.52 million net income in the fourth quarter was an increase compared with the third quarter of 2008, which incurred a devastating loss of USD21.57 million, including USD21.62 million of provision for the impairment of goodwill.
Total revenues for the full year of 2008 were USD96.69 million. Of that total, WVAS revenues were USD86.91 million, total mobile games revenues were USD7.74 million and total mobile advertising revenues were a ridiculously small USD2.04 million. Net loss for 2008 was USD20.66 million.