Recykal: For this Hyderabad-based start-up, even the waste glitters

The sheer size of India's garbage problem and the tightening noose around bulk waste producers present an opportunity for waste management start-ups

From social media to television to schools, we constantly hear about the environmental problems the world faces today. While most people share their concerns and move on, 14-year-old Kritika Sharma once decided to do her part in solving the crisis. She started segregating waste at home, but soon stopped after the waste collector told her that all the waste ultimately get mixed up when he drops it at the local garbage dump.
 
This was about three years ago. For people like Kritika, there are now several ways to get part of their waste recycled, thanks to waste management start-ups that have come up across the country. Many entrepreneurs have now realised the opportunity in the "ever-flowing stream of waste" and are looking to tap into it through different business models. One such start-up Recykal, based in Hyderabad, recently bagged $2 million in a pre-series A funding round.
 
Other start-ups in the field include ExtraCarbon, Paperman, Let's Recycle, Attero, and Hasiru Dala.
 
The idea behind Recykal
 
The cloud-based waste management and recycling start-up works as a facilitator, connecting waste generators (businesses and households) with waste aggregators and recyclers. The company conducts this operation through a host of mobile applications and tie-ups.
 
"Once a user orders waste pick-up through our app, we task our aggregator partners to collect the waste, process it and transport it our partner recyclers," co-founder Abhishek Deshpande explains. The firm, he says, has increased business for its partners by 10 per cent to 15 per cent by connecting them to each other and increasing their visibility.
 
Started by Deshpande and Anirudha Jalan in 2016, the start-up is mostly dependent on commission from aggregators and recyclers for revenues. Recykal also generates money by charging a fee for providing EPR (Extended Producer Responsibility) certificates to companies.

Recykal factbox

Founded: 2016
Area of biz: Waste management
Funding: $12 million in pre-series A  round
Investors: Triton Investment Advisors, the Mumbai-based family office of adhesive maker Pidilite Industries director Ajay Parekh, and Vijay Acharya, former Bank of Singapore managing director
Market: Indian waste management market is expected to reach $14 billion by 2025

 
Opportunity
 
The biggest positive for the industry is what usually troubles many in the manufacturing industry — the supply of raw material. "The waste will never stop flowing... all we need to do is start seeing it as a resource or as an opportunity,” says Deshpande.
 
Data from the Central Pollution Control Board shows that India generates 25,940 tonne of plastic waste everyday. This is close to the weight of 9,000 Asian elephants. 
 
The government's push for a “Swachh Bharat” has also provided a boost to waste management start-ups. The biggest thing, according to Deshpande, the campaign did was that it brought about a change in the mindset.
 
Moreover, the rising magnitude of the problem is forcing MPs and MLAs to bring in laws to contain it. And going by previous experiences, new laws in this regard are likely to usher in growth for these start-ups. For example, the Plastic Waste Management Rules published by the Centre in 2016 proved to be a game changer for waste management start-ups that deal with bulk producers. Its key element, the Extended Producer Responsibility (EPR), makes companies responsible to get their produce recycled after the end of its life cycle. This resulted in more business for waste managment start-ups.
 
According to a report by market research firm Novonous, the Indian waste management market is expected to reach $14 billion by 2025.

Anirudha Jalan (left) and Abhishek Deshpande, founders of Recykal

 
Challenges
 
Though the country is now more aware of the issue, a broad change in mindset is yet to happen. For Recykal, this problem is not just limited to waste generators. "The sector is still an informal one and it works on cash. Making them open accounts and accept bank transfers is a challenge for us," says Deshpande.
 
Then there is lack of awareness. Though the Swachh Bharat scheme has brought some change, many Indians still lack awareness, especially with regards to waste management. Growth of Recykal and other such start-ups will depend on how early people become aware of the concept and the solution they provide.
 
Beyond awareness, success in this field will also depend on how motivated people are to act towards it. Deshpande says they are using the “greed and fear” formula to bring in more users. “One one hand, we inform people of the dangers the rising amount of waste poses and on the other, we offer them rewards in the form of coupons,” he says.
 

Expert Take

Partner organisations play a critical role

Recykal founders' tech exposure and understanding are visible in the ease use of its platform. The platform seems to integrate stakeholders of the sector like waste generators, handlers and recyclers.

It's known that opportunities in the waste management and recycling sector are increasing, although the potential risks involved will be constant expectation of higher reward value from customers, environmental compliance by partners dealing with waste, and stickiness.

I understand that the role of partner organisations is critical which must be viewed in line with the risks it brings along. It would be interesting to see the company's revenue model.
 

Sandeep Patel

Sandeep Patel, CEO - Founder, Let’s Recycle