Deal focus: Circles.Life strives to be different

Circles.Life was born out of frustration. The origin story has one of the founders queueing up for an hour several years ago for a new iPhone only for the store to run out of stock when his turn came. It might be true; it might be a parable on the trials of Singapore telecom. Either way, Rameez Ansar, Abhishek Gupta and Adeel Najam – who shared PE, VC and telecom experience – thought they could do a better job.

“They were in private equity, evaluating telco businesses, so they knew the companies were very profitable, but they also recognized that customer service was bad,” says Rohan Talwar, head of corporate development at Circles.Life.

Circles.Life has now completed three rounds of funding in the past 12 months – the most recent being a $75 million commitment from Warburg Pincus – on the back of a business model that managers to be nimble in areas where other telecom operators cannot. The physical infrastructure of a traditional telecom business is bound together by an array of billing, inventory management and marketing systems run by outsourced vendors. Changes are expensive and painstaking.

Circles.Life built its technology stack from scratch and amalgamated all these systems in the cloud. There was no outsourcing, so it could tweak the offering – no-contract, data-focused mobile plans with a user-friendly app – in response to customer feedback. “Every three weeks we would go through a cycle and introduce upgrades,” says Talwar. “We were able to reduce capex and opex by 80-90% and make changes quickly. As a result, we launched in two countries within two months.”

The company now holds a 5% market share in Singapore and claims to have already reached breakeven point. Taiwan and Australia are expected to follow suit over the next 12-18 months, with Talwar noting that Circles.Life’s low costs – 20-30 people can run a single jurisdiction – means breakeven can come with a 1-2% share.

Market entry is contingent on finding a local mobile operator willing to sign a long-term contract based on revenue sharing. Arguably the greater challenge is convincing customers to move over from their existing provider. It requires significant investment in marketing and brand building, but gradually referrals start to kick-in. More than 50% of Circles.Life’s new customers in Singapore now come through referrals.

Southeast Asia and the Middle East are the company’s near-term expansion priorities. It also wants to diversify into new product verticals, having already launched event ticketing in Singapore. These wider ambitions will inevitably bring Circles.Life into closer competition with other mobile virtual network operators (MVNOs), but Talwar dismisses the threat.

“Do we know of anyone who has developed a tech stack that handles the end-to-end customer journey? No. Google is trying but it has delivered nothing material. Likewise, Apple has talked about it but we haven’t seen much.”

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• Topics
• Southeast Asia
• Expansion
• Technology
• TMT
• Singapore
• Warburg Pincus Asia