Cardinal takes bet on SIM tech for travellers with ‘significant investment’

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Private-equity investment firm Cardinal Capital Group has invested in Travelwin Group, the parent company of Sim Local, through its Cardinal Ireland Partners fund.

This marks the third investment from the €250m fund, which dedicates it growth investment to companies across the island of Ireland.

Following what the firm has dubbed a “significant investment”, Mike Maloney and Daragh Lane from Cardinal will join the Travelwin Board.

Sim Local is the first product in what became a stable of travel-tech brands under the Travelwin Group’s umbrella. Selling pre-paid SIM cards for local networks from 300 contracted sales points across Europe and the US, Sim Local served 700,000 customers in 2019. The same year, the company was named among the Deloitte Technology Fast 50, which identifies the fastest-growing tech companies in Ireland.

Though the business has taken a hit due to the curbing of international travel during the Covid-19 pandemic, Cardinal is betting that a turnaround in fortunes will come when the tourism industry bounces back.

“Before Covid, Sim Local was growing very quickly in the pre-paid SIM-card market. As the world comes out of lockdown and international travel opens up we are delighted to invest behind Killian [Whelan] and his management team to help the business scale internationally,” said Maloney, who is managing director of private equity with Cardinal Capital.

Whelan established Sim Local in 2011, capitalising on demand for local SIM cards from travellers keen to avoid roaming charges on phone and data services when abroad. A spin-off brand, NetLync, launched in April to take an advantage of a new opportunity emerging in electronic SIMs, or eSIMs.

These virtual SIM cards provide the same service as a physical SIM, but with data stored in a few lines of code on a dedicated chip in a phone rather than on a traditional SIM. Vodafone Ireland announced earlier this summer that it would offer eSIMs across 25 of its devices from July.

While Vodafone has lauded the environmental benefits of eSIMs, which cut down on the plastic required for traditional SIM cards, NetLync aims to leverage demand for easy call service switching for international travellers.

Sim Local also claims to have developed proprietary software that allows customers to download data and voice-call bundles in seconds.

“This investment by Cardinal Capital along with their expertise in scaling companies will help Sim Local to take advantage of what is a tremendous growth opportunity in the international pre-paid SIM card and eSIM markets,” said Whelan, who leads Sim Local as CEO.

Whelan is also happy to have added the former CEO of payments company Payzone to the parent company board. Cardinal’s previous fund with the Carlyle Group bought Payzone for €39m in 2015. It was later sold to AIB and First data for €100m.

“Mike’s experience successfully scaling Payzone to become Ireland’s leading point-of-sale and electronic-payments company should prove invaluable to Sim Local as we chart a similar trajectory,” said Whelan.

Whelan’s travel tech ventures received early backing from Enterprise Ireland.

The Cardinal Ireland Partners funded previously invested in e-commerce platform Luzern Solutions as well as Mowlam Healthcare, a major nursing-home operator.

John Dolan, managing director of private equity at Cardinal, recently told Siliconrepublic.com that investees from the Cardinal Ireland Partners fund can expect an investment of €10m to €40m.

Software solutions and tech-enabled services are of prime interest to Cardinal, but Dolan said that the firm is “very much open to chatting to all entrepreneurs or founders about what their growth plans might be and whether that involves taking in new capital”.

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