Recykal: Transforming Waste Management in India with Innovative Solutions

In 2015, Abhay Deshpande found himself at a crossroads after selling his second startup, MartJack, a software-as-a-service (SaaS) platform that facilitated the transition of brick-and-mortar retailers to the online sphere. Instead of choosing a life of leisure and financial comfort, he embarked on a journey into what he calls “kachre ka kaam,” which translates to the business of waste. His unconventional decision would lead to the creation of Recykal, a trailblazing venture that’s revolutionizing waste management in India.

After leaving MartJack, Deshpande delved into waste management with no prior experience in the field. He relied on his “gut feel” to identify a significant problem to address. India, he recognized, generates a staggering 62 million tonnes of solid waste each year, a figure projected to nearly triple to 165 million tonnes by 2030 and a staggering 450 million tonnes by 2045 due to rapid urbanization, population growth, and economic development.

At present, only about 70% of the 62 million tonnes of waste generated in India is collected, with a mere 12 million tonnes being treated. The remaining 31 million tonnes ends up in landfills and oceans. The entire waste management industry in India, encompassing the collection, transportation, and disposal of garbage, sewage, and waste products, is valued at $100 billion, according to Deshpande. He emphasizes that “waste management or w-commerce is 5x bigger than e-commerce and 10x bigger than m-commerce,” making it a thriving, pandemic-resistant, and recession-proof business.

What spurred Deshpande’s entry into waste management was the lack of attention to the post-consumption phase. While disruptions in pre-consumption and consumption markets had seen tremendous innovation and investment, the post-consumption phase, or waste management, remained largely untapped. Deshpande and his co-founders, Abhishek Deshpande (Abhay’s cousin), Anirudha Jalan, Ekta Narain, and Vikram Prabakar, recognized that waste is essentially raw material for someone else and began their journey in waste management in 2017.

The journey began with a consumer app named “Uzed” that allowed consumers to have their waste collected from their homes, receive payment for it, and have it delivered to nearby kabadiwalas (junk dealers) and recyclers. While this B2C service gained half a million consumers across Hyderabad and Pune, it incurred losses for every transaction. The reverse logistics process, involving weighing and counting waste, was time-consuming, making the model unsustainable. However, it provided the necessary entry point into the waste management ecosystem.

In 2019, Recykal shifted its focus to the B2B segment, targeting bulk waste generators such as large corporations. With the Recykal Marketplace app, businesses could easily schedule waste pick-ups, and local kabadiwalas were notified and engaged to manage the collection. The process streamlined waste handling while providing businesses with a hassle-free way to fulfill their waste management requirements. Recykal acts as an aggregator and facilitator, partnering with local kabadiwalas, aggregators, and recyclers, and offering the technology and logistics to ensure proper waste disposal.

The adoption of Extended Producer Responsibility (EPR) regulations in 2017 marked a significant turning point for Recykal. Under EPR, manufacturers are responsible for the proper disposal of their products once consumers have finished using them. This led to the creation of Recykal’s “EPR Loop” app, which over 100 brands now use to meet their EPR obligations.

EPR regulations, initially applicable to plastics and e-waste, have brought 20,000 companies into the fold, injecting around $8 billion into the sector in 2020, with annual growth of 20%. These regulations have also helped formalize a previously fragmented and opaque industry, providing traceability and accountability. Recykal’s services have garnered the attention of major companies like Unilever, Coca-Cola, Pepsi, Infosys, and Pidilite, allowing them to trace the disposal of their waste and meet their ESG and sustainability goals.

Recykal has channeled over 86,000 metric tonnes of waste through its system. Currently, it processes 20,000 metric tonnes per month and aims to handle 300,000 metric tonnes of plastic and 40,000 metric tonnes of e-waste in the current year. The company’s vision is to manage 3 million metric tonnes by 2025, representing a substantial portion of India’s waste and reinforcing its commitment to building a comprehensive waste management ecosystem.

Investors, including Circulate Capital, have lauded Recykal’s innovative approach and the team’s ability to connect various stakeholders in the waste management value chain. Abhay Deshpande’s experience as a seasoned entrepreneur has played a pivotal role in building an innovative and scalable business model that delivers social impact and financial returns. Recykal’s continued growth and influence signify a bright future for waste management in India.