Connectivity is vital to a future that is managed and shaped by intelligent hardware. The Chinese startup Showmac Tech proposes eSIMs as an infrastructure solution for seamless and stable communication between devices and the service providers behind them.
Xiaomi accepted the proposal and distributed an investment for the startup's angel round in 2017. Now Showmac has convinced more investors to be on board as the company transferred nearly 100 million yuan ($ 15 million) to Capital and Hongtai Aplus in an Addor Capital-led Series A + round involving GGV.
“We believe cellular communication will become a mainstream trend in the age of IoT. WiFi only works when connected to a small number of devices, but when the number increases dramatically it becomes unreliable, "said Lily Liu, founder and chief executive of Showmac, during an interview with theinformationsuperhighway.
In contrast to a conventional SIM card, short for "Subscriber Identity Module", an eSIM does not have to be on a replaceable card, so the SIM card slot of a device is no longer required. Rather, it is welded onto the integrated chip of the device during assembly and applies to various network operators. For chip manufacturers, Showmac's eSIM works like an application or software development kit (SDK), says Liu.
The company started as a pilot to deliver eSIMs to the Xiaomi connected device ecosystem and then formed a unit when the solution proved its feasibility. The core products today include eSIM cards for IoT devices, eSIM communication modules and gateways, and connection management software as a service.
To date, Showmac has powered more than 10 million devices, around 30% of which are connected to Xiaomi. Through in-house development and external investment, an empire of IoT partners has built that relies on the operating system and reach of consumers.
The majority of Showmac's customers are vendors of common goods, "ownership and usage rights are separate," said Liu, who holds a PhD in economics from the prestigious Huazhong University of Science and Technology in China. Shared bikes and Luckin's shared coffee mugs are just a few examples.
Showmac is hardly a forerunner in the global eSIM space, but the founder believed few competitors could match it thanks to its connections with Xiaomi in terms of supply chain resources.
“As an R&D-oriented and relatively young team, we are very fortunate to have experienced a large industrial activity in which hundreds of thousands and even millions of products are produced every day. (Xiaomi) gave us this valuable opportunity, ”said the founder.
With 40 to 50 employees in Beijing and Shenzhen, the startup is currently focused on the Chinese market, but plans to expand overseas in the long term.
"We're not the first to make eSIM in the world, but because we're in China, the center of global electronics manufacturing, we're in a superior position to get things done," suggested Liu.
The arrival of 5G is a blessing for the startup, the founder believed. "5G will spurn more IoT devices and applications, requiring IoT (devices) with cross-carrier and cross-regional capabilities," she said.
Showmac says it will spend its newly raised capital on mass production of its integrated eSIM modules, research and development, and business development.