Hong Kong-based uCloudlink Group Inc. officially kicked off its IPO run-up on Monday, seeking to raise up to $50 million.
A marketplace for mobile data traffic sharing, uCloudlink uses its cloud SIM technology to distribute mobile data from 230 network operators in 144 countries. The platform allows users to connect to local network operators in those countries without the need to switch SIM cards, according to its prospectus filed Monday with the SEC.
The mission of uCloudlink: “to enable people to use mobile data traffic freely anytime, anywhere like breathing the air.”
In the trimester through March 2020, uCloudlink said its average daily active terminals reached approximately 274,800. In 2019, 90,600 terabytes of data were consumed through its platform – triple the amount in 2018. It also said it served 187,700 daily active terminals last year.
In 2018, uCloudlink held 41% of the market share as a provider of portable Wi-Fi service for international roaming for Chinese outbound travelers, the company said, citing commissioned research by Frost & Sullivan. In 2023, the total market size of international roaming service is expected to reach $34.8 billion and the mobile data connectivity service industry is expected to reach $1.2 trillion, according to the research firm.
However, uCloudlink said in its filing that Covid-19 has negatively impacted global travel and has thus weighed on the demand for international data connectivity. The company estimated revenue increase of up to 37.7% year-over-year for the first quarter of 2020, but a decrease of up to 38.5% from the fourth quarter.
For the three months through March, uCloudlink estimated revenues of $33 to $34 million on income of between $100,000 and $400,000. As of March 31, it estimated it had $45.6 million in cash and cash equivalents and borrowings of about $6.5 million.
For the year ended 2019, the six-year-old platform reported revenues $158.4 million, up 25% year-over-year. Net income was $5.2 million in contrast to net loss of $26.6 million for 2018.
Underwriters on the deal are I-Bankers Securities Inc., Valuable Capital Ltd., Tiger Brokers (NZ) Ltd., and Loop Capital Markets LLC.
The company filed to trade its ADSs on the Nasdaq Global Market under the symbol “UCL.”
One of uCloudlink’s top rivals in the market is Skyroam Inc. In August 2018, uCloudlink started a patent infringement lawsuit against Skyroam and its holding company, California-based SIMO Holdings Inc. The latter filed a counterclaim and alleged uCloudlink’s patent in the litigation was invalid, though the U.S. patent regulator denied the petition in February. UCloudlink is also battling Skyroam in China courts.
On its website, Skyroam says it provides wi-fi connectivity with its hotspots in over 130 countries. It offers monthly wi-fi plans up to 20 gigabytes for $99, a $ 9-day pass, and pay-per-GB plan for $6 per month.