Private equity

Why Warburg Pincus invested in a Singaporean mobile virtual network

Big brand private equity companies are opening their wallets for high-tech, low-asset companies riding off consumers unabated demand for mobile internet access. Singapore’s Circles.Life is the most recent recipient of their financial backing.

With the continuous and rapid development of information technology, capturing consumer traffic volume is the new gold rush.

Global mobile data traffic is projected to increase nearly sevenfold between 2017 and 2022, according to Statista. And so far so good, because as of February 2019, mobile devices accounted for 48% of web page views worldwide, with mobile-first markets such as Asia driving up the numbers.

The glowing outlook gives confidence to investors like Warburg Pincus to bet on companies like Circles.Life, a Singapore-based “digital” telco that offers full service mobile network services, but doesn’t have physical retail stores to promote their wares or, as they see it, impede their growth.

The startup said on February 11 that it has received a substantial investment from Warburg Pincus for an undisclosed sum, although its likely to be between $100 million to $400 million based on the US PE firm’s historical investment track record.

Existing investors including Sequoia, EDBI and Founders Fund who all participated in this round of fundraising. Circles.Life said it is now “well capitalised to further accelerate its growth and expansion into new markets”.

Founded in 2016, Circles.Life very quickly became one of the largest digital telco companies in the country with a 5% market share in Singapore. Digital telco companies offer wireless communications service but do not own the network infrastructure themselves. According to Circles.Life, its services are supported by its proprietary software platform Circles X, to deploy its products to customers in near real time.


The Lion City seems like a good place to kick off a business with this line of work. According to the Singapore government’s website, mobile data used has jumped significant in 2019, increasing from average 18.84 petabytes per quarter in 2018 to an average of 21.2 petabytes per quarter until Q3 2019.

Circles.Life claims to have already broken even in Singapore.  Rohan Talwar, head of corporate development in the company told FinanceAsia that its next step is to break even in Taiwan and Australia in 2020. It expanded its service into these two markets in 2019, making it one of few digital telcos in Asia with multi-countries services.

Singapore currently has four telecos that provide services and equipment. Australia’s TPG Telecom is the fourth and was granted a licence in December 2016. The incumbents are Singtel, StarHub and M1. There are seven others who only provide mobile virtual network operations without owning the physical infrastructure. Circles.Life is one of them.


The telco market however is not one for the faint of heart. Singapore is likely to witness a 5% contraction in mobile contract revenue in 2019, driven by rising adoption of SIM-only plans, although capex has peaked already, DBS said in its Asean Telecom Sector report published in January 2019. But revenue is expected to stabilise from 2020 onwards, as the temporary adjustment of TPG’s introduction cools down.

Digital telco such as Circles.Life, with their low-cost model and convenient customer service (it’s 100% app-based), may attract a substantial number of customers, especially the low-income segments who are shifting to cheaper SIM-only plans.

In Singapore, Circles.Life partnered with mobile service provider M1 to offer services for its own clients and shares revenue with M1. “We have one partner for each geography,” Talwar said. “It’s a win win partnership and the contracts are long term in nature.”

DBS also expected 2% of the total revenue generated by all telecom operators will go to mobile virtual network operators (or MVNOs) this year in Singapore, and this could increase to 3.5% by end of 2020.

The growth potential becomes the reason for Warburg Pincus’ investment this time. “We see a tremendous growth opportunity for Circles.Life, particularly within the rapidly digitizing mobile market in the Asia Pacific,” said Saurabh Agarwal, managing director at Warburg Pincus. “The industry has not adapted quickly enough to provide a seamless experience to its customers in this new age, creating a large white space for technology-enabled challengers.”

With its backing, Circles.Life is well-positioned to further accelerate its growth and transform the fast-growing industry by providing personalized lifestyle experiences to customers, said Abhishek Gupta, co-founder of Circles.Life.

¬ Haymarket Media Limited. All rights reserved.
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