Tink Labs

Tink Labs, once a Hong Kong unicorn, raised an astounding $160 million from prominent investors like FIH Mobile, Cai Wensheng, Sinovation Ventures, and even SoftBank. Its business model involved supplying hotels with free smartphones for guests to avoid roaming charges, and theoretically, promote hotel services. By 2018, Tink Labs had an impressive global presence, with devices in 600,000 hotel rooms across 82 countries, boasting major clients such as Hyatt Hotels and InterContinental Hotel Group. Despite this outward success, the company was plagued by an unproven business model and poor unit economics. Former employees revealed that Tink Labs pursued aggressive growth targets, setting unachievable sales quotas and threatening employees who didn't meet them. While growth is often prioritized in venture-backed startups in winner-takes-all markets, Tink Labs' approach was unsustainable. The core issue was that as the company grew, its expenses outpaced its revenues, leading to a rapid burn rate. The product itself, while seemingly innovative, may not have commanded a price point that could cover operational costs if not heavily discounted or subsidized, indicating a lack of true product-market fit at a profitable scale. The massive funding masked these underlying problems, allowing the company to delay facing the reality of its financial viability. The mismanagement of funds, fueled by the aggressive, unprofitable growth strategy, inevitably led to severe liquidity problems. Despite the substantial investment, the company ran out of cash quickly. A significant setback was the abrupt discontinuation of a major project involving SoftBank, which critically impacted its operations and financial stability. This incident, combined with the inherently flawed unit economics and an unsustainable drive for expansion, pushed Tink Labs to shut down in 2019, serving as a stark reminder that even multi-million dollar funding rounds cannot compensate for a fundamentally unproven or unprofitable business model.