Renting Electronics – Early Movers, Compounding Advantage

01 /The Concept

Circular lets consumers rent gadgets and electronics instead of buying them – a monthly subscription in place of a purchase. The founders believe this is where tech consumption is headed.

Subscription terms run 3, 6, 12, or 24 months depending on the product category. Shorter terms suit temporary needs – a camera for a project, a laptop for a contract engagement. Longer terms are for everyday ownership-equivalent use. The founders say long-term subscriptions outnumber short ones by two to one.

Subscription approval works like credit underwriting: Circular evaluates financial health before confirming a subscription. At end of term, customers can return, buy out the device, extend the subscription, or swap into something newer.

On the buyout option: Circular credits 50% of subscription payments toward a purchase price. But almost nobody uses it. Customers are renting because they want to rent, not because they're financing a purchase in disguise.

Circular's current market is Southeast Asia and Oceania, with operations in Singapore and Australia. Revenue tripled over the past 12 months. The plan for the next 12 is to triple again in both existing markets, with potential new location launches on top.

Circular went through Y Combinator in 2022 and has now announced two rounds totaling $7.6M.

02 /Why It Matters

In Europe, the tech rental model has been running for years. Grover, [covered in an earlier review](/review/vzjat-v-kredit-ili-v-arendu), has been making the case since 2021 that "the future of tech is renting, not owning," and raised a $330M round in 2022 (including $220M in debt) to scale European demand. In Southeast Asia and Oceania, the model is less mature but not absent – Circular's bet is that being early in the right region is worth more than entering a crowded Western market.

Zooming out: the secondhand goods market has grown from a curiosity to a structural force. In 2021, resale of used clothing alone was a $36B market; projections put it at $77B by 2025, growing eleven times faster than overall apparel retail. Electronics follow similar dynamics.

But here's the angle that rarely gets discussed.

For the secondhand market to function, sellers have to exist. Someone has to actually want to offload their old stuff – and do it in volume. The market doesn't generate itself.

In every product category, roughly 10% of buyers generate 30% to 70% of category revenue. These "superconsumers" are perpetually buying the next new thing. The problem: they typically hate the hassle of reselling their old items – the listings, the messages, the meetups, the negotiations, the post-sale complaints. So the old stuff goes on a shelf.

If a service can systematically capture superconsumers as sellers, it gains access to 30–70% of a category's supply side without having to compete for it.

Croissant applied this logic to fashion resale, [covered previously](/review/reshaem-staruju-problemu-no-vryvaemsja-na-novyj-rynok): partner with online retailers to add a guaranteed buyback offer at checkout. The shopper knows exactly who will buy their item back and at what price before they've even finished their purchase. Croissant gets a reliable, high-volume supply channel. The retailer gets a conversion boost. Croissant raised $24M in its first round at MVP stage.

The same dynamic applies to electronics. That 10% of heavy buyers churns through devices constantly. As Circular's founder notes, they just put the old device on a shelf – because selling it through classifieds is a hassle nobody wants.

Circular's subscription model is actually the most elegant solution to this supply problem: customers return devices at end of term by definition. No reselling friction. No logistics negotiation. The supply just comes back.

What gets muddied in Circular's current messaging is that the platform is simultaneously pitching "try every new gadget" to superconsumers and "save money and help the environment" to bargain hunters. These are different people with different motivations, and blending the messages weakens both.

03 /Opportunities

The secondhand goods market will be at least three times its current size within a decade. The entry window is now – before the category consolidates.

The structural challenge for any player in this space: two distinct products for two distinct audiences.

The supply side targets people who own goods and want to offload them without friction. The superconsumer is the ideal supplier: high volume, regularly cycling, motivated by ease over price maximization.

The demand side targets buyers seeking value or sustainability in used goods. Different demographics, different marketing, different user experience.

Trying to serve both from a single product creates exactly the kind of mixed messaging Circular currently has. The solution is to treat them as separate products – or at least separate funnels – even if they share backend infrastructure.

Circular could run both sides: partner with electronics retailers to add "subscribe instead of buy" and "we'll take your old device" options at checkout (Croissant's playbook), targeting superconsumers on the supply side. Then sell or re-rent returned devices through a separate channel aimed at value-conscious buyers.

Sella, [covered last summer](/review/luchshe-chem-procenty-ot-prodazh), offers a third-party variant: the company takes used goods from sellers who don't want the hassle of listing, then handles the sale through classifieds using a network of independent resellers – acting as guarantor and intermediary. They raised $3M in their first round.

The combinations available – rental, buyback, resale, retail partnership, own-site, third-party distribution – are many. The key discipline is separating the supply acquisition strategy from the sales strategy and being explicit about which audience each serves.

The market is growing fast enough that there's room to get the structure right without rushing.