Tink Labs
A start-up that put smartphones in hotel rooms and collapsed within weeks of a billion-dollar valuation
- Founded
- 2012
- Closed
- 2019
- Lifespan
- 7 years
- Total funding
- $160 million
- Peak valuation
- $1 billion
- Country
- Hong Kong
- City
- Hong Kong
- Sector
- Travel
- Founders
- Terence Kwok
- Investors
- Sinovation Ventures, Cai Wensheng, FIH Mobile
- At its peak
- Handy devices in around 600,000 hotel rooms in more than 82 countries
- Cause of closure
- Ran out of cash
What did it do?
Tink Labs was a Hong Kong-based start-up that placed smartphones called Handy in hotel rooms for guests to carry around the city. With the device, guests got unlimited mobile data and free local calls, while hotels could promote their own services on the same screen.
Why did it shut down?
The company rolled out its devices rapidly, reaching around 600,000 rooms in more than 82 countries, but in 2019 the cash needed to sustain this network was close to running out. Undergoing a restructuring, Tink Labs told staff on 11 July 2019 that it would pull out of markets such as China, Denmark, Indonesia, the Philippines and South Africa. Operations stopped on 1 August 2019; around 80 per cent of staff were laid off, and more than 100 employees in Europe, the Middle East and Africa did not receive their July salaries. Hotels in Morocco and Thailand were told that cellular service on the devices would be cut off within a few hours. Contracts in Hong Kong and Singapore were transferred to a separate company called Blockone Limited.
The story
Terence Kwok founded Tink Labs in Hong Kong in 2012. The company's product, Handy, was a smartphone left in hotel rooms. Guests could take the device with them and use unlimited mobile data and free local calls around the city, while hotels could promote their own services and offers on the same screen. In Hong Kong, seeing a Handy phone in a hotel room became commonplace.
Handy spread around the world quickly. At one point the company reached around 600,000 hotel rooms in more than 82 countries. It raised a total of USD 160 million from investors including Lee Kai-fu's Sinovation Ventures, Meitu founder Cai Wensheng and Foxconn-affiliated FIH Mobile, and its valuation passed USD 1 billion. That made it one of the handful of Hong Kong start-ups to reach a billion-dollar valuation.
The collapse came swiftly in the summer of 2019. On 11 July staff were told that the Handy service would end in markets such as China, Denmark, Indonesia, the Philippines and South Africa. As part of a restructuring, the company announced that operations would stop on 1 August. Around 80 per cent of staff lost their jobs; more than 100 people in the Europe, Middle East and Africa offices did not receive their July salaries. Hotels in Morocco and Thailand were told by email that cellular service on the devices would be cut off within a few hours.
Contracts with hotels in Hong Kong and Singapore were transferred to a separate company called Blockone Limited; but this company, too, stopped providing the devices free of charge to some Hong Kong hotels. Those affected included some serviced apartment chains in Europe.
The Tink Labs story shows how fragile growth achieved by rapidly spreading hardware across a vast network can be without a solid revenue stream. A network that had reached hundreds of thousands of rooms fell apart within a few weeks as soon as financing dried up.
Lessons for founders
- In a model that grows by spreading hardware across hotels, track market by market when each device pays for itself; expanding into 82 countries can also multiply the number of unprofitable markets.
- A billion-dollar valuation is a measure of scale, not proof of profitability; spot and plan for the need to shrink before the cash runs out.
- When deciding to close or downsize, prepare a plan for your responsibilities to employees and customers; unpaid salaries and a service cut off within hours do lasting damage to trust.
Sources
- Tink Labs ceases Handy smartphone service in most markets (TTG Asia, 2019-08-27)
- Hong Kong start-up Tink Labs ends Handy smartphone service to nearly all markets amid restructuring (South China Morning Post)
- Handy phones parent Tink Labs wound down (Serviced Apartment News)
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