As a technology, eSIM has been around for a decade. However, global eSIM adoption was around 3% last year and will only exceed 5% this year.
Despite these figures, analysts, eSIM startups and investors are positive about eSIM’s upside, largely thanks to travel.
Device compatibility
One of the key drivers for this is phone manufacturers launching devices with eSIM capabilities.
The first batch of eSIM smartphones arrived in 2017 and 2018, with the Pixel 2 and iPhone XR among the most notable phones. In 2022, Apple ditched the physical SIM slot to go eSIM-only in the US market, and Google followed suit with the Pixel 10 this year.
This year, Apple upped the ante by launching the eSIM-only iPhone Air and optionally offering an eSIM-only iPhone 17 series model in more than 11 countries. A key advantage of these eSIM-only phones is that they offer slightly longer battery life than models with a physical SIM slot.
Analytics firm Counterpoint said that in 2024, eSIM smartphone penetration was just 23%. The US is the strongest market for eSIM, with 41% of devices launched in 2024 having eSIM capabilities.
Until recently, eSIM was a feature of flagship devices, but this is slowly changing. The GSMA said that in the first half of 2025 alone, brands launched more than 60 eSIM-enabled smartphones.
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China can be a major driver for eSIM adoption. This October, after Apple’s eSIM-only phone launched and some issues, China’s telecom operators began offering eSIM support. Pablo Iacopino, an analyst at the GSMA, said local manufacturers such as Huawei, Xiaomi, Oppo and Vivo will likely release more eSIM or supported devices.
These manufacturers have a large share in economically sensitive markets in Asia and Africa. They may gradually include eSIM support across price ranges to support domestic demand.
“Chinese brands, when they see that Chinese MNOs have launched eSIM services for the domestic Chinese market, will likely start introducing eSIM to a wider range of smartphones, including the mid-range and low-end market,” Iacopino said. “But I don’t think they’ll go eSIM-only right away. They’ll start with both physical and eSIM support, before moving to eSIM-only models.”
Currently, even on eSIM-enabled devices, few people use the technology — but that’s changing. Steffen Sorrell, head of research at Kaleido Intelligence, a telecom analyst firm, said he saw an activation rate of 30% in eSIM-capable devices in 2024. The company estimates that rate will rise to 75% by 2030.
Travel is a great catalyst
While traveling, eSIM is one of the most convenient ways to get connected. A GSMA survey said that 51% of eSIM users use it for travel. In addition, it is a more secure solution, since often the eSIM hardware is connected to secure hardware components, which makes it difficult to hack.
These figures were positive for eSIM provider startups Airalo, Holafly, eSIM.me, Nomad and Truely. Even Lithuania-based security provider Nord has launched one eSIM service called Saily. Most of these companies have seen growth in their customer base, and this is largely due to travel.
The GSMA said that travel is currently proving to be a strong catalyst for eSIM growth, as frequent travelers prefer to purchase eSIM-enabled devices. Moreover, they could adopt eSIM for their long-term use.
“Users might try eSIM for the first time while traveling. Those users who like the eSIM experience would return home and ask their network providers to switch from a physical SIM,” GSMA’s Iacopino told TechCrunch on a call.
Airalo is one of the largest eSIM companies and has been in business for over six years. The company’s CEO, Bahadir Ozdemir, said the app is responsible for many users encountering eSIM for the first time. The company did a survey on its app last year, with 85% of respondents being first-time eSIM users.
“About 15% of travel connectivity is powered by eSIM and the number is growing. Once users discover how they can connect with eSIM, they really don’t want to go back to the old way [physical SIMs] to do it,” noted Ozdemir.
He said that while many telecom providers offer eSIMs, it is not easy for customers to discover them and apps like Airalo make the process easier. Network operators are also considering the travel eSIM market. For example, Vodafone has partnered with UEFA to launch a specialist eSIM for travelers attending football matches across the continent.
Development and investment interest
Travel-related eSIM startups have seen remarkable growth. He honestly said that he has served more than 70,000 travelers in the past two years, with a 2-fold increase in orders this year. The startup, which highlighted a $2 million expansion round in Junesaid that in addition to working with fintech services and travel appsalso explores government partnerships in various regions.
NordVPN said its Saily eSIM app saw a seven-figure user base after its launch in March 2024. The company also launched a $60 per month Ultra plan with global coverage.
Holafly said it has sold more than 15 million eSIMs since its launch in 2018 and has surpassed $500 million in total revenue. The startup noted that of this amount, it earned $200 million in 2024.
Airalo’s blockbuster $220 million round, led by CVC and announced in Julymade it a unicorn and the most notable eSIM investment of the past two years. Meanwhile, French eSIM startup Kolet has taken over $10 million in Series A funding led by Daphni featuring former Expedia Group CEO Peter Kern and former Apple VP of Marketing Jon Gieselman.
Scott Shiao, director of Goodwater Capital, said the focus of investment will currently be on consumer-side eSIM travel-related startups, but there could also be an opportunity in domestic markets in the future.
Martell Hardenberg, partner at Antler, said that while the eSIM use case for travel has grown, many users can be considered early adopters and there is still a lot of room for growth.
“I think there’s an opportunity to bundle services to global travelers or digital nomads around what companies can offer beyond travel SIM cards and make it a lucrative package for those user profiles,” Hardenberg told TechCrunch.
Investors will likely look for supply, marketability for long-term bets, as there may be consolidation a few years down the line, Kaledio’s Sorrell said.
“The market is obviously on the rise, but I think sooner or later we will reach a saturation point in terms of providers in the market there. So investors will look at the long-term viability of the business along with things like customer loyalty, quality of coverage, even the correlation with marketing capabilities, how you can promote that eSIM, whether it’s from the companies, from the airlines, from banks, from airlines.”
Challenges to adoption
Some barriers to adoption are education, trust and ease of use. Many people simply don’t know what an eSIM is.
“Spotify can tell people to download Spotify because people know about music, and Netflix can tell people to download Netflix because people know about TV shows,” Airalo’s Ozdemir said. “But we couldn’t do that with Airalo, as many people don’t know about eSIMs.”
He noted that the company regularly works with various influencers to educate people about on-the-go connectivity through eSIM and redirects them to Airalo.
Indeed, CEO Eric Dadoun believes that since there is a steady increase in eSIM-only devices, consumers will be forced to be aware of the technology as well. He said companies working in the eSIM industry will continue to focus on educating users to acquire customers in markets where buying an eSIM-only device is optional.
One of the more extreme parts of using an eSIM is that when you buy a plan from any of the apps, you get a QR code in your email that you have to scan to install the eSIM. This means you need a second device that displays the QR code. The whole process is a pain if you are visiting another country and want to buy an eSIM when you are in an airport.
The GSMA’s Iacopino agreed that the process is burdensome for many users, and as adoption increases, eSIM providers and hardware manufacturers will have to find a way to make the process smooth.
Kaleido Intelligence’s Sorrell noted that for some network providers, the transition to eSIM is slower, as they have legacy technology and systems that are proving to be an obstacle. They should also make the process of transitioning to this technology fully digital so that customers do not have to visit a store.
