Circles Life bets big on secret cash cow as other efforts fall short

Circles Life made a splash in Singapore in 2016, when it introduced generous and customizable mobile data plans at ultra-affordable prices.

The company is a mobile virtual network operator (MVNO), which means that it doesn’t own wireless infrastructure but instead leases it from telecommunications firm M1. Within three years, Circles Life claimed that it had raked in 5% of market share in the city-state. It says that the figure has gone up since then, but it didn’t share specifics.

Having made its mark in Singapore, where the MVNO says it’s profitable on a unit economics basis since 2018, Circles Life went regional in 2019 and expanded its non-telco offering with mixed success, dipping its toes into financial services and more.

The company’s efforts were fueled by funding: It has raised over US$70 million in equity financing to date, according to market intelligence firm VentureCap Insights.

That amount, however, doesn’t appear to include financing from global private equity firm Warburg Pincus, which typically invests up to a few hundred million US dollars.

Along with that, Circles Life’s costs have also ballooned. Between 2018 and 2019, its revenue increased 30% to US$67 million, but this was outweighed by losses that grew eightfold to US$50 million, according to public filings seen by Tech in Asia. In addition, the company was losing money on each dollar it made during those years.

However, a Circles Life spokesperson said those figures don’t capture the “full extent” of the investments made in its new markets and technology, or the return on them. Its launches in Australia and Taiwan, for instance, both happened in the second half of 2019.

“We’re quite happy with their outcome and that’s why we’re doubling down on even more investments in 2020,” the spokesperson added.

Circles Life envisions that eventually, telco companies will be more than just dumb pipes. In this future, operators will incorporate non-telco digital services and have the ability to switch gears and launch products fast.

More importantly, the company believes that it can help traditional telcos do this via a secret weapon: Circles X. That business is already making substantial money for Circles Life, the spokesperson revealed.

Putting the brakes on fintech

Circles Life’s ambitions were never limited to simply being a telco operator. It was looking to launch a fintech venture and even considered getting a digital banking license in Singapore at one point, but those initiatives were watered down in the last two years. Tech in Asia spoke to four former employees familiar with the company’s plans.

Fending off competition

Branching out

A secret weapon

Pushing borders