First of all, congratulations to CEO Ahmet Bahadir Özdemir COO Abraham Burak, co-founders of Airalo, which reached a $1B valuation in the its C round. When you look at the numbers, it’s pretty impressive. Starting up in 2019 with a seed round of $1.9M secured by Antler and Sequoia Capital, the company followed up with an A round in 2021, which generated $5.4M, and another $60M in a 2023 B round, which had five telco venture firms participating. Now, following it’s two-year cycle, Airalo raised an additional $220M, which means a $1B valuation, led by CVC, with participation from Peak XV Partners and Antler.
Birthing a Telecom Unicorn
Birthing a Telcom Unicorn has not been of interest in the buzz years of Unicorns. If I dared bring up the idea of investing in capital equipment and patented hardware, I might as well run the food truck on sidewalk by their office (it was the only way I was going to see money from them). I constantly was told, it’s all about software. To be fair, Airalo is a software play and, to the public eye, all you see is “app.”
But, for years, if you said telecom first and not software, you were tuned out. But, the blue ocean of buzzwords – including software, SASE, MSP, or app – kept their interest (no matter how red the ocean was getting).
While telecom is still a turn off, vertical market success still gets funding, and NVIDIA has given rebirth to some hardware and edge compute solutions.
Airalo’s rise in customers is also somewhat meteoric from 5+ million users in 2023 to today’s 20+ million. The company says it serves 200 countries (which is five more than I know about).
As Hamish White pointed out in his LinkedIn post, “This is precisely the kind of success story the telecoms industry needs – great digital innovation layered on top of traditional mobile networks. For those who’ve been building in the space, it’s a powerful validation of where things are heading.” He continues, “eSIM isn’t just a niche anymore – it’s becoming the future of mobile. And clearly, the investor world agrees.”
SGP32 and eSIM: The Gift that Keeps on Giving
I’ll be honest, When I first read the spec on SGP32, I thought the MNOs were going to clamp down on the solutions and be slow to adopt the process for IoT specifically. Clearly, I was wrong.
Airalo seems to have been enable to negotiate with enough carriers to give a local plan for the 200 countries it covers. Whatever the backend tool is that is covering inventory and enabling the app to swap as needed is pretty amazing and, obviously, is scaling well.
FloLive, likewise, has done for IoT something similar with its core network. Having been quoted rates for regions that are an order of magnitude cheaper than the “home carriers’” roaming agreements.
Another case in point is AT&T’s deal with Eseye, which we can characterize as an “If you can’t beat them, join them” strategy.
Last, but definitely not least, is the deal between Kigen and Simetric, where Simetric’s CMP that manages the eSIMs is no longer in the carrier’s systems, but managed internally by the enterprise. While I am sure there is a lot of prep work that has to be done in API mapping to provide this service within the enterprise, I believe that, in the long term, this is one of the biggest game-changers.
Roaming Agreements: The Last Buggy Whip Maker
In the movie, “Other People’s Money,” the CEO (played by Gregory Peck) of a failing company comes to the shareholders asking them to stay the course on deteriorating copper wiring business, which is followed by Danny Devito’s shark character, who sees the sum of the parts (splitting the company up) as being bigger than the whole company. He makes the case that you have to change with the times. Otherwise, you are the last buggy whip maker in the age of the automobile.
Roaming agreements have always been a “must-do necessity,” usually with a small staff performing a thankless job until they retire. Sometimes the agreements are so out of whack that large staffs of accountants are hired by both sides of the dispute, often costing more than the disputed money itself.
My belief is that Airalo and the rest of the companies mentioned will eventually end the life of roaming agreements and the innovations of eSIM implementations may see more unicorns.
