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🤙🏻 How this $1.5B hotel phone empire burned $170M in 7 years
Never bet against technological progress
Admond Lee
February 09, 2025
Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Today’s story is about how a Hong Kong’s unicorn failed because of betting against technological progress. Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Tink Labs
⚠️ 2 Mistakes → Underestimated global connectivity trends
🧠 3 Lessons Learned → Never bet against technological progress
🔗 The Runway Insights → Best startup ideas to work on in 2025 (by YC)
💰 Southeast Asia Funding Radar → fileAI raises $14M in Series A funding to fuel expansion of AI-driven document automation
☠️ 1 Failed Startup: Tink Labs
🚀 The Rise of Tink Labs
🇭🇰 Tink Labs was founded in 2012 by Terence Kwok, a 20-year old University of Chicago dropout from Hong Kong after getting slapped with a $900 roaming bill during a trip.
His vision? To keep travellers connected without the dreaded roaming charges.
The Problem — 🌏 Travelers often faced high roaming charges and inconvenience in buying local SIM cards when visiting a new country.
Hotels also struggled to upsell services like spas or restaurants to guests.
The Solution — 📱 Tink Labs provided free smartphones (called Handy) placed in hotel rooms.
😍 For travellers — Guests could get free unlimited calls (local & international), internet, travel guides, and hotel services integration (i.e. room service, concierge).
🏩 For hotels — Hotels loved it because it enhanced guest experience and guests spent 20-30% more on amenities by collecting guest data and offering targeted promotions.
🤓 In short, Tink Labs provided a win-win solution to both travellers and hotels with their free-to-use smartphones (Handy).
 Handy Device | 😂 And guess what? Handy devices went crazy. By 2016, Tink Labs expanded to 100+ hotels (1 million monthly users), dominating Hong Kong and Singapore with at least 50% market shares. By the end of 2018, Handy devices were used in 600,000+ hotel rooms across 82 countries, including Hyatt, InterContinental and Shangri-La. |
🤯💰 At its peak, Tink Labs raised $170M from Foxconn, SoftBank, Sinovation Ventures and Meitu’s founder at a $1.5B valuation, reaching the coveted unicorn status in Hong Kong.
From there, Tink Labs aggressively expanded across the globe, riding on the promise of disrupting the hospitality industry. They even added VR headsets and acquired a luxury travel magazine.
📉 The Fall of Tink Labs
🦄 Well… The unicorn status didn’t last long.
Tink Labs' meteoric rise was matched by its swift downfall due to the rapid decline in roaming charges and the ubiquity of personal smartphones that made Handy less essential.
📌 Here’s what happened to Tink Labs:
I am trying to do what I can, but a lot of things are now out of my hands.
🤙🏻 Handy devices became very handy
2012 — Tink Labs was founded by Terence Kwok, initially renting smartphones to tourists at Hong Kong International Airport.
However, this approach didn’t take off as planned.
2013 — Pivoted to providing Handy smartphones in hotel rooms.
2016 — 🌏 Expanded to Europe, Japan, and the US after securing funding.
Raised over $170 million from renowned investors like Foxconn, Sinovation Ventures, and Cai Wensheng (Meitu’s founder) at a valuation of more than $500 million.
Had a team of 150 people (with plan to 3x its headcount).
Expanded to 100+ hotels (1 million monthly users), dominating more than 50% market shares in Singapore and Hong Kong.
2018 — 🔥 Handy devices were used in 600,000+ hotel rooms across 82 countries, including Hyatt, InterContinental and Shangri-La.
Hit $1.5B valuation
📱🤳 Personal smartphones everywhere (Handy devices not so handy)
Mid 2019 — Began shutting down operations and laying off staff.
Services halted in Thailand, Morocco, and 8 other markets.
🪓 Massive retrenchment — Laid off 80% of staff.
More than 100 Tink Lab employees across its offices in Europe, Middle East and Africa (EMEA) did not receive their salaries for July.
1 Aug 2019 — ⚰️ Tink Labs officially shut down, ending its journey.
Hotels in Singapore/Hong Kong could keep devices — for a fee.
We recently wrote to notify you that, due to operational changes, Tink Labs will no longer be supplying or servicing Handy smartphone devices in your geography.
📈📉Tink Labs rose fast and fell even faster.
While Handy was innovative, its business model didn’t adapt to market changes. The rise of affordable roaming, Wi-Fi, and eSIM technology made Handy redundant. Combined with reckless expansion and unsustainable costs, Tink Labs collapsed in 2019, marking the end as a Hong Kong’s unicorn.
🦄 In short, Tink Labs soared by giving free phones to travellers, crashed when roaming got cheap, and burned $170M trying to be a tech empire.
Want to learn more about Tink Labs’s downfall?
⚠️ 2 Mistakes
Mistake 1: Unproven business model
Based on TechCrunch’s article, Tink Labs pricing started at $1 for each device in a hotel room per day.
While smartphone rental to hotels was a good GTM to scale in the beginning, ultimately the unit economics didn’t seem to work out as the revenue upside was also limited by the business model and the number of hotel rooms available, not including the declining demand of Handy given the enhanced global connectivity, smartphones affordability and accessibility — which led to the 2nd mistake.
Mistake 2: Underestimated global connectivity trends
Tink Labs' core product, Handy, was built on the assumption that hotel guests needed free internet, calls, and travel guides on a separate device.
⚠️ The problem? The world was changing faster than they anticipated, and they failed to see the rapid evolution of global connectivity that ultimately made Handy irrelevant because of:
🤳 The Rise of Affordable Roaming Plans
Before 2015: Roaming charges were sky-high, making Handy an attractive alternative.
2015 – 2018: Telecom companies worldwide began offering cheaper international roaming plans, especially for business travellers.
🔥 The Explosion of eSIM Technology
Before 2018: Travelers had to swap out physical SIM cards, making Handy’s free calls and data useful.
2018 – 2019: eSIM adoption surged, allowing travellers to instantly activate cheap international data plans (without swapping SIMs) — Airalo was one of the successful eSIM companies.
🛜 The Global Expansion of Free Wi-Fi
Hotels, airports, and cafes massively improved their Wi-Fi infrastructure.
Travelers could just connect to free Wi-Fi instead of using Handy’s mobile data.
When the market shifted faster than expected, Tink Labs’s hardware-dependent business model didn’t work as the demand disappeared, causing Tink Lab to collapse after failing to adapt.
🧠 3 Lessons Learned
Lesson 1: Unit economics > Growth at all costs
While Tink Labs had a great GTM strategy by selling to hotels to offer Handy phones to their guests, the unit economics didn’t really work out as it was essentially running a hardware business (high costs) with limited scalability.
🌮 Key Takeaways:
🌏 Test small, then dominate
Start with 1 country, prove market demand and profitability, before expanding to other markets.
This is especially true in Southeast Asia as every market is drastically different and expanding to different markets is no easy feat.
💰 Keep iterating your business model
Make sure there’s a path to profitability instead of burning money and hoping that you’ll become profitable after reaching the “X” milestone.
When the market changes, be ready to pivot to another business model quickly to adapt.
Lesson 2: Never bet against technological progress
🛜 Tink Labs made a fatal mistake → they assumed the problem they were solving in 2012 (expensive roaming and lack of internet access for travellers) would remain relevant forever.
It didn't.
By the time they hit unicorn status in 2018, their biggest value proposition — free calls, data, and travel guides on a separate device — had already become obsolete.
Why? Because tech moved fast and the world moved on. By 2018, even budget travellers had smartphones with internet access. So why would they use a random hotel phone instead of their own?
🌮 Key Takeaways:
🦄 Don’t be afraid to “kill” your company
As Mark Cuban famously said, always be paranoid to ask:
“What are other people’s next moves?”
“What technology could kill my business in the next 3-5 years?”
If you can’t answer that, probably you’re not looking hard enough.
Set a “Worst-Case Scenario” meeting every quarter to discuss existential threats.
Only by expecting potential disasters ahead, can you fix your business and take advantage of opportunities when the time is right.
🙏🏻 Stay close to your customers and adapt quickly
Set up customer feedback loops to catch market shifts early.
If customers start using alternatives, adapt before they leave you completely.
For example, Netflix saw DVD rentals declining, so they pivoted into streaming — before it was too late.
The result? Netflix won, Blockbuster died.
Lesson 3: Grow slowly, but surely
Tink Labs went all in on rapid global expansion without validating long-term demand.
They scaled from 1 million users in 2016 to 600,000+ hotel rooms across 82 countries by 2018 — but their business model wasn’t sustainable.
By the time they realised its hyper-growth approach backfired, it was too late.
🌮 Key Takeaways:
⚡️ Validate product-market fit (PMF) before scaling
Test deeply in one market first and dominate there.
Refine your business model before expanding — focus on customer adoption, retention, and profitability.
Remember → PMF = Retention
📈 Focus on sustainable growth (not just fundraising)
Raising money doesn’t mean your business is strong.
If you’re burning investor cash without a path to profitability, you’ll be in trouble sooner or later.
Fundraising is fuel, but if your engine is broken, more fuel won’t help.
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
fileAI raises $14M in Series A funding to fuel expansion of AI-driven document automation (Link)
Ampotech raises from Clime Capital to expand energy management platform in SEA (Link)
Nibertex raises Pre-Series A funding to innovate nanofiber technology (Link)
Goat Gaming lands $4M to expand AI-powered web3 games on Telegram (Link)
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
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