A startup called Circular, supported by Y Combinator, allows subscribers in Singapore and Australia access to premium goods, including iPhones, Samsung Galaxy devices, iPad Pros, and MacBook Pros. It wants to keep gadgets out of landfills and let individuals buy them for less money while keeping them in use for as long as feasible.
The business said a seed round of $7.6 million was raised today, raising its total valuation to $30 million. With participation from YC Continuity Fund, Global Founders Capital, Partech Ventures, and January Capital, AirTree Ventures led the investment round. Additionally, angel investors like the creators of PropertyGuru, Funding Societies, Stashaway, Carousell, and Nutmeg participated in the round.
The Circular team points out that the tech subscription model is most common in Europe, where one business, Grover, raised $330 million in 202n. However, the concept is still fresh in APAC, and Circular intends to capitalize on this by becoming the first to market in the area. According to the firm, it expanded three times in the last year and expects to expand three times more in Australia and Singapore in the coming year. There are at least two more tech subscription services in Singapore, one of which is ITEZ.SG focused on enterprises rather than consumers.
According to Circular’s CEO and co-founder Nick Ramsay, sustainability is one of its core principles. He observes that many people often replace their gadgets and relegate their outdated phones, which are still functional, to the back of cabinets or drawers. In terms of resource consumption and electronic waste, all of this has a huge environmental impact, he claimed.
Since each gadget is used till the end of its existence, Circular argues that its business model eliminates waste. It collaborates with what it refers to as the industry’s top refurbishing experts and sells both new and reconditioned equipment.
The Circular subscription services include free damage insurance up to 90% of the repair cost and were established in Singapore in 2021. It now offers items on its website starting at $74 a month for an Apple iPhone 15 Plus, $64 per month for an Apple iPad Pro M2 12.9″, and $94 per month for a Lenovo Thinkpad T14 (Gen 3) 14-inch laptop. According to Circular, users may save up to SGD 955 on the iPhone 15 Pro Max 256GB compared to buying the phone straight from Apple. In addition to its primary categories of phones, tablets, and laptops, Circular just started including gaming items in its Singapore catalog.
Ramsay stated that he is a “strong advocate for transitioning towards the circular economy, and believe many people are beginning to question the trade-off between access and ownership when it comes to tech products” as they became more aware of issues like climate change and wasted resources like underutilized tech products, according to Ramsay.
Ramsay served as the chief product and technology officer of MoneySmart Group, one of Southeast Asia’s biggest financial product aggregators, before founding Circular. The author claims that at that period, he realized that current financial solutions for consumers and SMEs “only serve to reinforce the linear economy and legacy concepts of ownership.”
Ramsay noted that customers no longer need to utilize credit cards and BNPL services or sign long-term contracts with telecoms because of the cheap cost of Circular’s monthly subscriptions.
When questioned why the adoption of subscription technology in Asia has lagged behind that in other regions, Ramsay responded, “It is clear that we are right at the start of a new consumption paradigm driven by the subscription and the circular economy.” According to him, “it was a similar story when the subscription model started disrupting digital products—but eventually, we all shifted away from buying CDs and downloading MP3s to streaming music on Spotify, and from buying and renting DVDs to watching shows and movies on Netflix.”
“There is a strong preference for owning physical goods as it carries a sense of status and accomplishment,” says Circular of one problem it faces in Asia. For a culture prone to being risk-averse and resistant to change, replacing the old taught behavior of device ownership with a subscription is a significant move.
The answer, according to Ramsay, is “myth-busting.” We typically hear that Singaporeans want to pay in full for their technology to partially recover their costs when upgrading to a new gadget after a year. However, more often than not, individuals never recoup that initial expense—especially if they fail to account for unforeseen costs from unintentional damage and the item winds up at the back of a drawer before being thrown away. He continued that people frequently undervalue the expense of depreciation for mobile phones and other technological gadgets, as well as the hassle of coming across a used phone.
However, the Singaporean government has prioritized reducing e-waste, which Ramsay claims “will play a massive, and critical role in accelerating adoption of the circular economy.” This is one advantage that Circular possesses.
The company offers adaptable solutions for clients eager to test Circular’s subscription-based business model. For instance, whereas some people may want a device for years, others may only require it for a few months. According to Ramsay, Circular receives, on average, twice as many long-term subscription requests as short-term ones. Customers presently have an option between four subscription plans, which differ depending on the product type: 3-month, 6-month, 12-month, and 24-month. The 12-month option is intended for consumers who desire the newest smartphone, while the shorter subscription periods are appropriate for short-term business or school tasks.
Circular provides a buy option for those who genuinely don’t want to give up their gadgets. The business will deduct 50% of customers’ subscription payments from the device’s list price. “Having said that, it’s a choice that our clients make extremely infrequently, which we don’t advocate for. Once customers sign up with us, we frequently observe that they soon return for a second or even third device once they realize how inexpensive and practical subscriptions are, according to Ramsay.
Ramsay responded that Circular’s subscription model spreads the cost of the device over multiple customers and subscriptions, making it less expensive than retailers’ payment plans. When asked why customers would choose Circular over the monthly payment plans offered by Apple and other electronic sellers, particularly those that charge no interest.
When a client is through using a device, they send it back to Circular for refurbishing. During this time, the gadget is wiped clean of all data, tested for hardware and software operation, and sterilized.
According to Ramsay, many customers are utilizing Circular to subscribe to earlier devices like the iPhone X and iPhone 11 at a significantly cheaper pricing point as concerns about inflation and the cost of life continue to influence consumers.
Ramsay noted that the demand for refurbished and older-generation devices that we naturally have on hand from our supply of end-of-cycle devices is increasing each month. “In the broader market, secondhand device sales are growing faster than new device sales,” Ramsay stated. To that aim, we continuously collaborate with our partners to find older models that are in excellent shape to add to our inventory of devices.
Circular aims to achieve six subscription cycles for each device. When it can’t be rented out anymore, it is recycled so that the components used in the gadget may be put back into use.
The business intends to utilize the additional investment to strengthen its product-market fit in Singapore and continue its growth in Australia, where, according to Ramsay, there is a strong desire for sustainable business models and a rise in demand for used gadgets. Additionally, it intends to concentrate on Circular for Business, a B2B service that caters to startups and SMEs.
The creator and partner of AirTree, Craig Blair, stated to investors that “Circular is at the center of the recurring and coming consumer trends, such as the move toward sustainability, shifting ownership preferences, and the desire to possess the newest technology. Additionally, the founding team of Circular possesses a strong and complementary skill set across business development, product development, engineering, marketing, and logistics. It excites us to lead their seed round and watch where they push the circular economy in the future.
