How this TravelTech startup raised a $5.4M Series A in the middle of a Global pandemic

As the world screeched to a standstill in the wake of the COVID-19 pandemic in March 2020, few sectors were hit as hard as the travel industry. Globally, international arrivals dropped to 381 million in 2020, down from 1.461 billion in 2019 — a 74% decline. According to the World Tourism Organization (UNWTO), the crisis put between 100 and 120 million direct tourism jobs at risk. As lockdowns fell into place worldwide, investors and entrepreneurs in the TravelTech sector switched to “survival mode”.

Yet in the midst of it all, Airalo persisted.

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Airalo is a startup born out of the second Antler Southeast Asia cohort which aims to bring instant connectivity by allowing worldwide travellers to purchase virtual eSIM packages. Airalo allows users to download an affordable plan directly to their phone without the hassle of needing to exchange a physical SIM card, resulting in a seamless and contact-free experience. Last month, Airalo announced that it had raised an impressive US$5.4M Series A round, led by Rakuten Ventures.

When Covid-19 began, Airalo was only four months old. Today, with fresh funding, they are expanding their global eSIM coverage to meet the needs of their daily users in more than 190 countries and regions in the world.

We spoke to Airalo Co-Founder Abraham Burak to find out how.

Keep reading to learn more about Airalo’s spectacular pivot and fundraising journey during a global pandemic.

What attracted you to want to build in the TravelTech space — what was the gap?  

Abraham: I have been living, working, and travelling in different countries since middle school. Finding connectivity was always a struggle out there. Despite all the emerging digital globalization trends, travel connectivity has remained antiquated. There are many things broken about it such as the political economy shaping its provision, issues with the infrastructure, and urban-rural gaps. It is an absolute mess. These issues translate into different levels of inaccessibility and lack of affordability for travellers.

Both Bahadir, my co-founder, and I were involved in the telecom sector. The juxtaposition of our observations from the sector and experiences as travellers inspired in us that there may be a gap in the market, and possibly, a market in that space. Since, as Theodore Levitt once said, “an industry is a customer-satisfying process, not a goods-producing process”, we thought eSIM, instead of physical SIM card that is at the core of many of the logistics-related difficulties, would be the right digital medium to create a paradigm shift and fix what has long been broken.

How did your respective backgrounds benefit you in the ideation process, pivoting and creating your company?

Abraham: In terms of planning, Bahadir is more concerned with high-level and abstract notions of the business, while I get obsessed with the practical and granular realities of day-to-day processes. In terms of decision-making, he is more concerned about being quick where I take my time with evaluations in detail to be right. In terms of strategy, he is more enterprising for continuous progress, and I prefer slowing down and dealing with small operational details. Similarly, he is a lot more courageous where I tend to be cautious.

As a result, Bahadir thrives where major transformations are necessary but struggles with routine. I, on the other hand, enjoy creating steadiness but flounder when quick changes are needed. We are both graciously accepting of these differences. This, when applied properly, helps us to balance structure with flexibility; speed with accuracy; long versus short-termism and avoid groupthink as much as possible.

Tell us your COVID story. How did you manage to stay afloat, pivot, adapt as necessary?

Abraham: COVID-19 lockdowns were a period of introspection for us. When international travel took the brunt of the hit, in its business implications, we made a lot of decisions about what not to do. As a new company with a long list of things to do to redefine travel connectivity worldwide, having to curb our enthusiasm was quite the challenge. From the get-go, we had already been subscribing to a lean culture. With the pandemic, we widened our definition of waste while keeping in mind the potential costs of ‘super-efficiency’.

In hindsight, it would be pretentious to say that we managed to stay afloat because of some advanced crisis management plan, accounting system, contingency, or scenario simulation. It wasn’t any of that. Even the most carefully planned forecasts were thrown out by the random and catastrophic nature of the pandemic.

If I am to pin down the real cause, I would say it has been the resilience of our team members. There are men and women at Airalo who live, sleep, and dream our quest of changing the face of connectivity.

Their collective belief that “this, too, shall pass” seems like the only reasonable explanation for how we managed to pivot through such a time of unprecedented uncertainty.

What was it like fundraising for a travel tech startup in the middle of a pandemic?

Abraham: Good question. As you alluded to, the travel industry was mostly going belly up or into hibernation mode. Even though travel became taboo, and any pitch based on it had a risk of making us look like snake oil salesmen, we were confident in and committed enough to our idea to keep looking for investment. We knew we had in our hands what might become a fine example of disruptive innovation.

Luckily, we crossed paths with a special bunch of long-term thinkers. As sector leaders, our investors knew very well the importance of being tolerant of risk and patient about returns. They were all aware that no winter lasts forever and, while payback periods may even be longer, Airalo can become a game-changer if allowed to flourish.

This trust and strategic thinking greatly helped with minimizing the challenges of doing fundraising during an apocalyptic moment in human history.

What have been some of the milestones your company has achieved since its inception? How has this growth been possible?

Abraham: There are a few.

As a trailblazer company, we are deprived of the luxury of benchmarking. So from day one, our users, especially the unhappy ones, have been our best source of learning. The more people joined, the more friends they brought, the more novel user experiences emerged for us to learn from.

Having interacted with hundreds of thousands of people from all around the world since our inception and gaining their trust has been a great milestone. Talking to our users every day has given us a clear understanding of the factors we need to take into account as we build this new way of travel connectivity together.

We have also enjoyed our part in giving back. As part of Airalo’s social responsibility projects, we have built water wells in a number of African countries making clean water accessible to local villages. We also created an internal fund to sponsor children worldwide who face various challenges growing up such as poverty, malnutrition, limited access to school and medical services, and social discrimination. Every time a new team member joins Airalo, we sponsor a new kid on their behalf. You could say every child has been a milestone for us.

What’s next for Airalo? How has the “new normal” impacted your growth and future?

Abraham: We love the new normal. The COVID-19 pandemic expedited long-standing transformations in digitalization. We do not plan to expand away from our core competencies anytime soon. Instead, we will keep using these spatial and temporal shifts to our advantage to provide the best quality of connectivity at the lowest cost.

We are in constant need of finding smart and adaptable people who have the creative, disruptive willpower to construct new realities. We hope to keep expanding our Toronto, Singapore, and Istanbul hubs with such talents while continuing to hire remotely from around the world.

Applying lateral thinking in the travel tech space, we are standing on the shoulders of giants. We will keep building strong partnerships from the telecom and travel industries letting everyone know that we have built a reliable and reputable platform that can help them to go through this inflection point created by the zeitgeist.

We will also continue to shed our skin through perpetual innovation both as an organization and as a product. So far, we have had a blast with early adopters who have generously embraced the brand. We will keep eliminating everything that is not valued by our users and simplify the user experience so that we provide instant travel connectivity to the late majority and the laggards alike.

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