Saturday, July 20, 2024

Transforming Waste into Wealth: Hyderabad Startup Digitizes Kabadiwalas 2023

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Recycle, a Hyderabad startup backed by Morgan Stanley is spearheading the digitization of waste management, challenging traditional practices. Amid initial skepticism, the company achieved a 3.9x revenue growth to ₹745 crore in the fiscal year ending March 2023. Recykal aims to revolutionize waste management, envisioning a future where 10% of India’s waste is brought into circulation by 2027, preventing landfill and ocean pollution.

Unveiling Hyderabad Startup India’s Waste Challenge

India generates a staggering 65 million tonnes of waste annually, expected to surge to 165 million tonnes by 2030 and a daunting 436 million tonnes by 2050. Recykal’s mission aligns with tackling this environmental crisis, focusing on formalizing the largely informal waste management sector.

Currently, India’s waste management sector operates informally, with households selling their collected trash to local kabadiwalas (scrap dealers), who, in turn, sell to buyers or recycling plants. Recykal steps in to bridge the gap between waste aggregators and generators, bringing digital efficiency to this process.

Hyderabad Startup

Digital Empowerment for Kabadiwalas

Recykal’s innovation extends to local kabadiwalas, empowering them with a digital platform. Through a user-friendly app, kabadiwalas can directly trade scrap, eliminating intermediaries and maximizing profits. This transformation requires scrap dealers to have a GST registration, ensuring compliance with regulations.

Recykal’s performance speaks volumes, with a significant revenue jump from ₹61 crore in FY21 to ₹745 crore in FY23, supported by Morgan Stanley’s $22 million funding in the latest round. The company’s growth aligns with its vision for a sustainable and circular economy.

Journey of Revolutionizing Waste Management

Founded in 2016, Recykal embarked on a journey to revolutionize waste management. The company started small in Gachibowli, Hyderabad, gradually expanding its footprint. The focus on learning and understanding the waste management domain set the foundation for Recykal’s success.

Innovative Tech Solutions

Recykal’s platform offers a streamlined marketplace connecting waste aggregators to various waste generators transparently. Clients include major brands like Coca-Cola, JSW, Johnson & Johnson, and others, emphasizing the platform’s broad impact on diverse industries.

Revenue Streams and Future Initiatives

Recykal’s revenue streams are diverse, including commissions on transactions within its marketplace and partnerships with brands for extended producer responsibility (EPR) obligations. The company explores additional revenue sources, such as a plastic credit scheme and a circularity platform to monitor the entire lifecycle of waste.

Deposit Return System (DRS)

A game-changer for Recykal has been the Deposit Return System (DRS), incentivizing consumers to return waste for a refundable deposit. The digital DRS initiative, implemented in collaboration with the Uttarakhand government, has shown significant success, with a recovery rate of 72% in certain locations.

Empowering Kabadiwalas and Future Goals

Recykal’s impact extends beyond business, empowering kabadiwalas through accessibility and awareness programs. Over 4,000 kabadiwalas have benefited from Recykal’s efforts. Looking ahead, the company aims to bring 10% of India’s waste into circulation by 2027, diversifying into new waste categories and implementing DRS in multiple urban local bodies.

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