17 November, 2023
For 31-year-old Rahul Nainani, co-founder and CEO of cleantech innovator ReCircle, India’s waste problem posed an interesting opportunity. It was in early 2015 that Nainani, along with his co-founder, Gurashish Singh Sahni, participated in the Google Startup Weekend which required budding entrepreneurs to pitch their ideas to a panel.
“During our research we came across how India was actually importing tonnes of trash from Europe and countries in the Middle East. This was more than US$1 billion worth of paper, glass and metals, to keep our recycling industries running,” he says. It was rather odd, as the one thing India isn’t short of is trash, he explains. There was value to be added here as the problem lay in the recovery of trash and not the waste itself. “Most of it ends up going into landfills and our oceans and that’s where we wanted to bring a change,” notes Nainani.
Founders, Gurashish Singh Sahni and Rahul Nainani
After winning at the Google Startup Weekend, the brand started operations under the name Raddi Connect in 2016, helping households across the country connect with recyclers to convert waste. Nainani, who is also an alumnus of the CFA (Chartered Financial Analyst) program, teamed up with Sahni, who was then working in real estate, to come up with viable solutions towards waste management. In 2021, they pivoted and rebranded as ReCircle, focusing on the B2B aspect of the business, catering to large MNCs and corporate firms to garner more traction.
Today, ReCircle works with over 60 brands, largely in the FMCG space, such as HUL, Hindustan Coca Cola Beverages, Dabur, and Mondelez among others, helping them reach their sustainability objectives and becoming plastic-neutral. It has recently raised a pre-series A round for an undisclosed amount from Flipkart Ventures, 3i Partners and Acumen Fund Inc, and plans to raise another round before the end of the financial year. The company now has a presence in over 250 cities and towns across India, and works with around 400 collection partners, recovering about 77,000 tonnes of waste last year and impacting over 3,000 informal workers in the fragmented waste management industry.
Edited excerpts from the conversation with Nainani:
When we started, one of the biggest challenges we faced was that there were no definitive sustainable development goals by the Indian government. The Swachh Bharat [campaign] was in the very initial stages of being implemented, while trash and waste management was not even a board-level conversation for many of the big brands. That’s when we were largely focused on the B2C model of connecting households with recyclers. The government started deploying separate policies for plastic waste management later, and it’s only then that we saw a shift, where it became mandatory for brands to become plastic-neutral.
"When we started, one of the biggest challenges we faced was that there were no definitive sustainable development goals by the Indian government," says Nainani
Scuba diving for marine plastic pollution
We realised that if we had to make a large impact on the ecosystem and make the business more sustainable, we needed larger volumes, and that would come from working with companies looking to reduce their plastic footprint. Today, B2B makes up about 95 per cent of our business. We have a 45-member team plus 50-odd Safai Saathis that work at our own collection centre in Dahisar, Mumbai.
To put it really simply, we charge the polluters and incentivise the collectors. So, if you are a brand producing plastic waste, we charge you for offsetting your footprint and we incentivise the recyclers and collectors with monetary benefits. For instance, if you’re a beverage company, selling 10,000 bottles in Maharashtra or 40,000 bottles in Gujarat, we use our tech platform, ClimaOne, to break down your waste output and plastic footprint state-wise. This includes traceability data, such as geolocations, quantity, quality, yields and so forth. The equivalent plastic waste is then channelised to registered waste processors across India.
One of the biggest costs in waste management is transportation, so we have created a network of recyclers and collection partners and match them geographically for better operational efficiency. The converted plastic credits are then sold to brand owners to help them go plastic-neutral.
We operate across a few verticals. Plastic neutrality, which is our B2B business, makes up a significant chunk of revenues. We have zero-waste events where we analyse companies’ waste processes and give them recommendations. This varies from D2C companies to brands who commit to recovering plastic from the ecosystem for every product they sell. For example, we are currently the waste management consulting partner for the ICC World Cup at the stadium in Ahmedabad. We also partner with events and festivals, to help them offset waste. Thirdly, we run our own collection centre with support from some grant programmes and we also have our B2C business, which makes up a small segment of revenues.
India is the third largest waste generator in the world and the fifth largest plastic waste generator. We generate nearly 62 million tonnes of waste in a year. To give some context, a city like Mumbai, Delhi or Hyderabad, generates about 7,000-8,000 tonnes of waste everyday which is the weight of 1,300 to 1,500 full-grown elephants. Now, the idea, naturally, is that while we have the largest population, we are bound to be the largest waste generator as well. That’s not exactly the case. The challenge is that 80-90 per cent of this waste remains untreated and reaches landfills and oceans. Our goal is to treat and tap into this waste.
"We have a 45-member team plus 50-odd Safai Saathis that work at our own collection centre in Dahisar, Mumbai."
One eye-opening example for us, was the Deonar (Mumbai) dumpsite fire in 2016. A study conducted by the NGO Apnalaya showed that the average life expectancy of people living around the dumpsite was only 38 years. If this was the ecosystem for just one dumpsite, how would it affect the rest of the country?
Cleantech and climate tech have become big buzzwords for investors, especially in the last six to nine months. Typically, about 80-90 per cent of investments in the climate space have been focused on Electric Vehicles (EV) and solar power. We are now seeing investors look at this space more closely. We wanted to work with investors who understand the ecosystem well and that’s been a challenge. We were lucky enough to find the right set of investors who understand our vision and add strategic value. We have been cash-flow positive for the last four years and have been growing 100 per cent year-on-year.
Tackling climate change is not a short-term impact and there is no one company that can make this happen. It requires collaboration from people across the supply chain. When we started, companies didn’t have a sustainability and compliance team. We wouldn’t even know which department to reach out to, and would often be asked to speak to HR teams to build awareness activities. This has changed now. Most MNCs today have a head of sustainability. It took us a lot of experimentation and trial and error to get the model right.
Currently, we are processing about 9,000 kilograms of waste every hour. We want to double or triple this figure in the next three years. We also want to tap into other scrap items. Textiles is a major area, as are glass bottles, and shoe recovery. Waste management requires people and we want to focus on using technology to catalyse their work and improve efficiencies. One of our next steps is to channel this recycled plastic back into the supply chain of the brands we work with, as ethically collected and recycled plastics. We’re also focused on strengthening our tech platform, investing in our collection partners, and building the core team.