A Hong Kong company that provides hotel guests with free smartphones has raised $125m from investors including electronics manufacturer Foxconn, making it one of the city’s best-funded start-ups.
Tink Labs, which was founded by 24-year-old university dropout Terence Kwok, said it would use the money to expand into new cities and develop more advanced phones that incorporate wireless charging and remote control for in-room air conditioning and televisions.
Started four years ago, the company rents its “handy” phones to hotels through long-term subscription deals.
Tink says the phones, which offer travellers free internet access and calls, help hotels improve the guest experience, sell extra services and gather data on customer preferences.
“We have taken a city-by-city approach up to now,” said Mr Kwok. “This funding round will allow us to grow internationally on a much grander scale.”
The company has already installed 100,000 phones in hotel room in 15 cities, including Hong Kong, Singapore and London. With the new investment, it hopes to expand to 1m phones by the end of next year.
Mr Kwok said his company, which has raised more than $170m in total, was “more than halfway to becoming a unicorn”, the term used to describe non-listed start-ups with a valuation of at least $1bn.
It is one of Hong Kong’s best-funded start-ups, alongside WeLab, a mobile lending platform that has raised $180m from investors including Sequoia Capital, Hong Kong tycoon Li Ka-shing and Khazanah, the Malaysian sovereign wealth fund.
As China faces a slowdown and the traditional pillars of Hong Kong’s economy such as shipping and tourism come under increasing strain, the territory is trying to pitch itself as a hub for start-ups, although there are few success stories to date.
Foxconn, a Taiwanese contract manufacturing group, is expanding its investments in start-ups as sales growth for large customers such as Apple has weakened.
Other investors in Tink include Cai Wensheng, the chairman of Meitu, a popular Chinese selfie application, and Sinovation Ventures, a fund backed by former Google executive Kai-Fu Lee.
Foxconn invested through FIH Mobile, a Hong Kong-listed subsidiary that has also invested in Meitu and led a previous investment round in Tink last year. It is working with Meitu to develop customised smartphones, as it is doing with Tink.
Vincent Tong, chairman of FIH, said that Mr Kwok, who is the youngest of his company’s 130 employees, has “extremely good business sense” for someone of his age.
He said that Tink should be able to scale up quickly with the support of Foxconn’s manufacturing capabilities and its global logistics network.
Mr Kwok said that after installing his devices, hotel customers such as Starwood and Accor experience an increase in their customer ratings on websites such as TripAdvisor.
He claimed that one Hong Kong hotel saw average guest spending increase $7 per day after it started offering Tink’s phones.
“Knowing is the first step to spending but most people don’t open the giant hotel directory in their room,” he said. “But more than 30 per cent of guests click on the hotel information when they’re browsing on our phones.”
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