Truphone raises $38M at $516M valuation as its eSIM business

Truphone, a UK-based startup that provides voice and data services for phones, tablets and IoT hardware by way of eSIM software integrated directly into the devices, has raised another round of funding to continue expanding its business. The company, which told TechCrunch today that it counts Apple as a key partner, has raised another £30 million, valuing Truphone at £410 million (or $38 million at a $516 million valuation at current rates).

Truphone said it would use the money to continue investing in software development and network upgrades “to ensure the business is equipped to deliver on further acceleration; and to support an expanding worldwide presence, particularly in North America and Asia Pacific.”

The company said it has now provisioned some 4 million eSIM profiles globally and is seeing further eSIM downloads of 20,000 daily.

Although eSIM technology was conceived as a quick way to switch carriers without physically changing fiddly, tiny physical cards (and subsequent carrier contracts), it’s an interesting datapoint right now, given that we are seeing a big focus on technology and transactions that can be run in a contactless way (thus avoiding the spread of the novel coronavirus).

“We have long championed eSIM as the superior method of connectivity, and it’s immensely rewarding to reap the benefits of this decision,” said Ralph Steffens, CEO of Truphone, in a statement. “We are delighted that our investors continue to support us as we develop this technology which is maturing and accelerating all the time. Backed further by our investors, the future looks bright for Truphone, our partners, customers and a better-connected world.”

Truphone did not disclose the specific names of investors but we have confirmed that the majority of the funds are coming from Vollin Holdings and Minden Worldwide — two investment firms with ties to Roman Abramovich, the Russian oligarch who also owns the Chelsea football club, among other things.

Collectively, Abramovich-connected entities controlled more than 80 percent of the company when Truphone last raised funding in 2018: part of its large shareholding also stems from an earlier fundraise, when the company raised $339 million to retire existing debt in 2017.

For some additional context, the company was valued at £386 million in its last fundraise in 2018, making this latest raise effectively a slight down round.

Truphone is not a startup in the “young” sense. It has actually been around since 2006, starting out originally as a provider of SIM cards that travellers could use in their phones to get cheap calls and data while roaming outside their home countries. That legacy MVNO business reached breakeven in September 2019, it said today.

In more recent years, it has pivoted to focusing squarely on eSIM services, taking advantage of the advances in hardware design that make it easier to switch carriers (and use cheaper data plans) without physically replacing a SIM card.

It was an early partner of Apple’s — a supporter of eSIM developments, first for its iPad tablets — and said today that in the last year has secured deals with 25 “major operator customers across four continents”, covering some 200 million customers, to expand its network of coverage to allow users to more easily switch between carriers, and seek out cheaper data deals. Its growth, Truphone said, makes it one of the three biggest eSIM providers now globally.

The company today says it provides several flavors of eSIM services. The first of these, an eSIM operating system that it calls SIM OS, works with eUICC and iUICC hardware, and “is a component-oriented, high-performance embedded operating system, fully compatible with most international and industry standards such as ISO, GSMA, Oracle’s Java, Global Platform, 3GPP and ETSI.”

The second of these is a secure remote SIM provisioning service. “Truphone’s platform works with any mobile network operator, is interoperable with any eSIM and supports consumer and M2M eSIM deployments” through this service, it said.

It also launched an entitlements server, an operator-focused service that allows carriers to enable the use, for example, of Apple Watch devices and other connected devices and objects on their networks.