The News
A startup looking to address steep roaming charges with lower-cost digital SIM cards is the telecom industry’s latest unicorn. Airalo has raised $220 million in new funding, valuing the six-year-old company at more than $1 billion.
Airalo — headquartered in Delaware but whose co-founder lives in Dubai — markets its app to travelers, giving them options to buy packages of calls and data for a fixed price by connecting to a local network in the country that they are visiting. The company reported a doubling of its number of users in the last year. Its latest funding will go toward new products that support data plans and the enterprise side of the business, which sells packages to companies with employees on the road.
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Digital SIM cards were a niche product less than a decade ago, when the concept for the Internet of Things — devices connected to the internet — was taking hold. Google was the first to offer an eSIM-enabled smartphone, and in the last several years major manufacturers like Samsung and Apple have made eSIMs standard, moving away from the physical chip.
Airalo’s investors are betting this is just the start. “The digital travel eSIM market, whilst already worth $1 billion, is at the very early stages of becoming the main method by which consumers can receive the highest quality experience abroad, at a much lower price,” a managing partner at the private equity giant CVC — which led the investment round — said in a statement.
Airalo was among the first movers in this new industry, but faces competition from other eSIM platforms like Dublin’s Holafly, and satellite broadband providers like Elon Musk’s Starlink.
Step Back
Airalo’s co-founder Ahmet Bahadir Ozdemir relocated to Dubai from Singapore to fundraise for the company’s Series B round, ultimately raising $60 million in 2023, led by the venture arm of UAE telecom e&.
While today the company is focused on the traveler market, Ozdemir sees a broader mission: “We’re building the infrastructure for the next generation of international mobile connectivity,” he said in a statement.