Airalo: the eSIM industry’s first unicorn

For a self-described “accidental telecoms guy”, Ahmet Bahadir Ozdemir, CEO of Airalo, is doing remarkably well. This week, the eSIM store he founded in 2019 announced a new funding round of $220m, along with a $1 billion valuation, marking Airalo’s status as the industry’s first unicorn. The brand is on course to be a household name, but Bahadir prefers to downplay it. “It's not like winning the lottery, right?” he says, “Because it doesn't happen overnight. You wake up and you just say, ‘OK, that's good news, but back to business.’”

Airalo provides a solution to a problem almost everyone has encountered; how to stay connected while travelling. In the past, a trip abroad meant paying extortionate roaming charges or having to buy and set up physical SIM cards in each new country. In 2018, when Apple began shipping the first eSIM compatible iPhones, Bahadir sensed an opportunity; a new way of doing things, and an emerging market. A year later he launched Airalo, the world’s first eSIM store and provider. Today, it serves more than 20 million travelers across 200+ destinations, and has a team spanning 55 countries. 

“Oprah moments”

Some businesses, Bahadir points out, experience what he likes to call “Oprah moments”. A brand gets mentioned on the talk show and boom: “the sales just surge, incredible, right?” For Airalo there has been no such moment, instead, he’s watched the company grow organically – and authentically. “One person will use it, and then that person will share it with ten other friends,” he says. “We will be inside WhatsApp groups with hundreds of people making holiday plans, vacation plans…we built something that was solving a pain from day one and people globally simply embraced it.” 

Bahadir gained a knowledge of the telecoms market through his work in the maritime industry, where he worked as a supplier. It was here he learnt about the challenges seafarers faced keeping connected as they sailed the world. “I'm selling these people, tomatoes, potatoes, you know, everything they need on the ship,” he says. “But they kept asking for SIM cards…” It led him to create a global roaming physical SIM card solution. But when eSIM compatible phones appeared on the market he realised he was at a crossroads. “I immediately knew that this was going to shift and affect my business,” he said. “If somebody came up with an Amazon of eSIMs, nobody would buy my physical global SIM card anymore...and if someone is going to launch an Amazon for eSIMs, that should be us.”

From the start, Antler, which is participating in the growth round, has played a key role in securing Airalo the funding it needs to grow. “A shout out to Jussi Salovaara [Antler managing partner in SEA],” says Bahadir. “He held my hand when I was a struggling entrepreneur, mentored me every week and introduced us to our seed, series A and series B investors.”

This support also helped the company weather the pandemic, which hit pause on global travel just as Airalo was beginning to grow. “We were four or five months in and suddenly the world just closed,” says Bahadir. “We were in the middle of a series A round, we had $36,000 left in our bank account, and I was really worried…how are we going to pay our suppliers? How are we gonna pay salaries? Fortunately Rakuten, the lead investor, believed strongly enough in our product to power through with us, and we just made it through Covid.”

The eSIM revolution

Since 2022, Airalo has grown fast, buoyed by the post-pandemic “revenge-travel” phenomenon. At the same time, the market for eSIMs has grown exponentially along with the number of eSIM compatible devices now available. In 2023, the eSIM market size for companies like Airalo was around $1.7 billion; now it's around $7 billion – and still only 15% of global connectivity is currently through eSIMs. In a matter of years, physical SIM cards will be completely replaced. 

The latest funding round, Bahadir says, will allow Airalo – which has the largest market share – to double down on its partnership strategy and build a global infrastructure for eSIM connectivity. “My dream is that every gigabyte consumed by a traveler somehow, has something to do with Airalo,” he says. The market is getting bigger, but Bahadir is not preoccupied by the thought of competition. “We keep doing our best, you know, to make sure we are relevant to our customers, and we like to keep it that way,” he says. “But the world doesn't have to be a zero sum game. Share the market. Be happy.” 

Don’t become a bubble

This attitude speaks to Bahadir’s business philosophy. He doesn’t believe in the “eat the world’ mindset, nor all the  “startup jargon”. He’s never bought into an approach in which you spend, spend, spend and figure it out later. Nor have they ever, he says, tried to inflate something that wasn’t already there. “I always like to say, Airalo has the vision of a unicorn, but the traditional metrics of a mama-papa shop,” he says. “One thing we've been very careful about was how do we make sure this doesn't become a bubble? How do we make sure this company, this idea, is always grounded.”

A down-to-earth approach shapes the company internally too. “Empathy is at the centre of what we do,” says Bahadir, who has experienced the hardship of being an entrepreneur who has to work hard to provide for his family, and – as the Turkish saying goes, “has had to swallow fire”, many times. “At Airalo we want to create a very psychologically safe place for our people,” he says. This, he says, creates a company in which people can take ownership, something he believes is vital to keep building a product that will eventually be used by millions globally. “We have this mission,” he says. “We want to prove to the world you can be kind and you don't have to be greedy and you can still make it. You'll still succeed.”`