Datawind: Connecting The Emerging Markets One $50 Tablet At A Time

Mar. 10, 2016 12:29 PM ETJeotex Inc. (DWDZF)4 Comments
Dan Stringer profile picture
Dan Stringer


  • DataWind is a small $43m market cap company developing hardware and Internet connectivity solutions focused on emerging markets.
  • Its proprietary data compression solution has allowed DataWind to market its low cost tablets to these markets.
  • DataWind has started bundling Internet access, mobile apps and targeted advertising with its hardware solutions.
  • DataWind has finally reached positive quarterly Adjusted EBITDA and reduced its cash burn.
  • A recent financing has helped to shore up its balance sheet while potentially giving clues that DataWind is hitting scale in its business model.

Please note that DataWind reports in Canadian dollars and trades on the TSX exchange as ticker DW.TO with greater liquidity. All amounts in this article will be denoted in CAD$.

DataWind Inc. (OTC:DWDZF) is a leading provider of low-cost technology and hardware to support the adoption of technology and Internet connectivity to the over 4 billion people worldwide who don't currently have Internet access.

We often forget in the developed world the connectedness we have now with such large mobile networks and wireless infrastructure on air, land and sea. However, many still don't have access.

7 countries alone have over 100m+ people with no Internet (Pakistan, India, China, Nigeria, Bangladesh, Indonesia, and Brazil). Some of these we think of as quite developed, but this can be often only the upper management. Many of these countries continue to have a large rural population that may not currently have access to the Internet or cannot afford it. This is the market DataWind is attempting to address.

DataWind was founded as a private company in 2000 by two brothers, Suneet Singh Tuli and Raja Singh Tuli, who are both active in the company as CEO and CTO respectively; they hold 4% and 9% of the outstanding shares. DataWind went public in its current form in July of 2014.

Historically, DataWind has focused on trying to get low-cost hardware out to those that can't afford the higher-end machines common in most developed countries. These tablets and smartphones cost the customer between $30-$120. However, as these represent one-time sales only, it is difficult to generate real growth, as the hardware replacement cycles are not as accelerated as they are in the developed world.

However, the company has been further developing its business model to develop a recurring revenue stream - Internet access. As part of a "razor/blade" type business model, in July

This article was written by

Dan Stringer profile picture
I am interested in small capitalized companies with a high optionality to the upside compared to the relative downside risk. I am grounded in a value based approach but will also explore special and short situations. I am a trained CPA and continue to practice in industry.Warning: my twitter account is very random but will have a lot of economic and business items sprinkled with Green Bay Packer comments.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in DWDZF over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: If I go long, it will likely be through the Canadian ticker DW.TO

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