eSIM adoption is on the rise thanks to travel and device compatibility

As a technology, eSIM has been around for a decade now. However, global eSIM adoption was around 3% last year and will only cross 5% this year.

Despite these figures, analysts, eSIM-providing startups, and investors are bullish about eSIM’s upward trajectory, largely thanks to travel.

Device compatibility

One key factor is phone makers launching devices with eSIM support.

The first batch of smartphones with eSIM arrived in 2017 and 2018, with the Pixel 2 and the iPhone XR among the most notable phones. In 2022, Apple ditched the physical SIM slot in the U.S. market and went eSIM-only, and Google followed suit with the Pixel 10 this year.

This year, Apple upped the ante by releasing the eSIM-only iPhone Air and offering an eSIM-only model of the iPhone 17 series in more than 11 countries. One key advantage of these eSIM-only phones is that they provide slightly longer battery life than models with a physical SIM slot.

Analytics firm Counterpoint said smartphone eSIM penetration was just 23% in 2024. The U.S. is the largest market for eSIMs, with 41% of devices launched in 2024 featuring eSIM capabilities.

Until recently, eSIM was a feature of top-end devices, but that is slowly changing. The GSMA said that, in the first half of 2025 alone, brands launched more than 60 eSIM-enabled smartphones.

China can be a significant factor in the adoption of eSIMs. This October, after Apple launched its eSIM-only phone and a few hiccups, China’s telecom providers began offering eSIM support. Pablo Iacopino, an analyst at the GSMA, said local manufacturers such as Huawei, Xiaomi, Oppo, and Vivo will also likely launch more eSIM-native or eSIM-supported devices.

These manufacturers have a significant share in economically sensitive markets in Asia and Africa. They can gradually roll out eSIM support across price ranges to meet domestic demand.

“Chinese brands, when they see that the Chinese MNOs have launched eSIM services for the domestic Chinese market, they will probably start introducing eSIM across a wider range of smartphones, including, medium and low-end market,” Iacopino said. “But I don’t think they will go eSIM only immediately. They will start with supporting both physical and eSIM, before shifting to eSIM-only models.”

Currently, even within devices with eSIM support, few people are using the technology — but that’s changing. Steffen Sorrell, head of research at Kaleido Intelligence, a telecom analyst firm, said that it observed a 30% activation rate in devices with eSIM capabilities in 2024. The firm estimates the rate will reach 75% by 2030.

Travel is a significant catalyst.

While you are travelling, an eSIM is one of the most convenient ways to get connected. A GSMA survey found that 51% users use it for travel. Plus, it is a more secure solution, as eSIM hardware is often bound to secure hardware elements, making tampering difficult.

These elements have been positive for eSIM provider startups such as Airalo, Holafly, and eSIM: me, Nomad, and Truly. Even the Lithuania-based security provider Nord launched an eSIM service called Saily. Most of these companies have seen growth in their customer base, largely thanks to travel. 

GSMA said that travel is currently a strong catalyst for eSIM growth, as frequent travellers prefer to buy devices with eSIM support. Plus, they could adopt eSIMs for long-term use.

“People might experience eSIM for the first time while travelling. These users who like the eSIM experience would go back home and request their network providers to make a switch from a physical SIM,” GSMA’s Iacopino told TechCrunch over a call.

Airalo is one of the largest eSIM providers and has been active for more than 6 years. The company’s CEO, Bahadir Ozdemir, said that the app is responsible for many users experiencing eSIM for the first time. The company surveyed its app last year, with 85% of responders being first-time eSIM users.

“Roughly 15% of travel connectivity is being powered by eSIMs, and the number is growing. Once users discover how they can get connectivity with eSIM, they don’t really want to go back to the old way [physical SIMs] of doing it,” Ozdemir noted.

He said that while many telecom operators offer eSIMs, it is not easy for customers to find them, and apps like Airalo make the process easier. Network providers are also thinking about the travel eSIM market. For instance, Vodafone partnered with UEFA to launch a specialised eSIM for travellers attending football matches across the continent.

Growth and investor interest

Travel-related eSIM startups have seen notable growth. Truly said it has served more than 70,000 travellers over the last two years, with 2x order growth this year. The startup, which raised a $2 million extension round in June, said it is also exploring governmental collaborations across different regions, in addition to partnering with fintech services and travel apps.

NordVPN said that its Saily eSIM app saw a seven-digit user base after its launch in March 2024. The company also launched a $ 60-per-month Ultra plan with global coverage.

Holafly said that it has sold more than 15 million eSIMs since its inception in 2018 and has crossed $500 million in total revenue. The startup noted that out of that figure, it earned $200 million in 2024.

Airalo’s blockbuster $220 million round, led by CVC and announced in July, made it a unicorn and was the most notable eSIM investment in the last two years. Meanwhile, French eSIM startup Kolet nabbed $10 million in Series A funding led by Daphni with participation from former Expedia Group CEO Peter Kern and Apple’s former vice president of marketing Jon Gieselman.

Scott Shiao, a principal at Goodwater Capital, said the investment focus will be on travel-related eSIM startups on the consumer side for the time being. Still, there could be opportunities in domestic markets in the future as well.

Martell Hardenberg, a partner at Antler, said that while the travel eSIM use case has grown, many users are early adopters, and there is still much room to grow.

“I think there is opportunity in offering bundled services to global travelers or digital nomads about what can companies offer beyond travel SIM cards and make it a lucrative package for these user profiles,” Hardenberg told TechCrunch.

Investors will likely look for an offering and marketability for a long-term bet, as there might be consolidation a few years down the line, Kaledio’s Sorrell said.

“The market is obviously on its way up, but I think sooner or later we’re going to reach a saturation point in terms of the providers on the market there. So investors will look into the long-term viability of the business along with things like customer loyalty, quality of coverage, and even association with marketing capabilities, how you’re able to promote that eSIM, whether it’s through airlines, banks, or cab companies,” he said.

Challenges in adoption

A couple of roadblocks in adoption are education, trust, and ease of use. A lot of people 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 a lot of people don’t know about eSIMs.”

He noted that the company regularly partners with various influencers to educate people about connectivity on the go via eSIM and to redirect them to Airalo.

Honestly, CEO Eric Dadoun believes that, given the steady rise in eSIM-only devices, consumers would be forced to learn about the technology as well. He said companies in the eSIM industry will still focus on user education to drive customer acquisition in markets where buying an eSIM-only device is optional.

One of the thornier 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 need to scan to install the eSIM. This means you need a second device to display the QR code. The whole process is cumbersome if you are visiting another country and want to buy an eSIM at the airport.

GSMA’s Iacopino agreed that the process is cumbersome for many users, and as adoption grows, eSIM providers and hardware makers will need to find a way to make it smoother.

Kaleido Intelligence’s Sorrell noted that for some network providers, the move to eSIM is slower because they have legacy technology and systems that are proving to be roadblocks. They would also need to make the process of switching to this tech fully digital so customers don’t have to visit a store.