Australian investors have poured more than $1 million into plastics recycling service RecycleSmart, as co-founder Marco Prayer says he has invested his entire career to proving the business benefits of the circular economy.
Sydney-based RecycleSmart provides households with a way to dispose of recyclable plastics that are unsuitable for regular recycling bins, offering to pick up unwanted waste from a customer’s doorstep.
The startup accepts soft plastics, clothes, shoes, and small e-waste, with those materials sorted and transferred to specialist recycling partners like APR Plastics, Mobile Muster, and the Red Cross, which accepts unwanted but wearable clothing.
The company claims to have facilitated 115,000 pick-ups since 2019, keeping 400 tonnes of hard-to-recycle waste out of landfill.
RecycleSmart closed its Birchal equity crowdfunding raise on Thursday night, booking $1.04 million from 965 investors.
While the business got its start by selling its services to NSW councils, it now hopes to use the new funding to expand in capital cities nationwide, while expanding its DTC and B2B offerings. Co-founder and chief technical officer Marco Prayer says RecycleSmart will use funding from the “astonishing” raise to power its launch in Melbourne, with the goal of covering as many major metro areas as possible by the end of 2023.
“We need to make sure that the recyclers have the capacity to manage, that we have the right infrastructure in place, that everything is safe, but so far, so good,” Prayer said on Monday.
Without delving into specific revenue figures, Prayer says RecycleSmart is enjoying “healthy” margins, and states its core business model is scalable, meaning expansion won’t come at too high a cost.
Reaching more councils remains a priority, but RecycleSmart hopes to diversify by reaching out to household customers, building managers, and even businesses themselves.
The company says its DTC offering would allow users to schedule pickups for $5 a bag, with a minimum of two bags per pickup.
Beyond the cost to customers, RecycleSmart is conscious of the need to prove the efficacy and sustainability of its process to would-be customers.
Australian households are still adapting to the high-profile collapse of the RedCycle soft plastic recycling scheme in 2022, which highlighted the difficulties in recycling some forms of single-use plastic.
The business is “trying to really deliver as much transparency as possible to our customers,” Prayer said, using social media to show how its partners repurpose the materials RecycleSmart collects.
“We know very well that the first step is establishing trust with anyone in the waste industry, and if you want to play that role, we know that we have to go an extra mile and verify as much as possible,” he added.
What appears to captivate Prayer is the possibility of working with major businesses as they adopt a circular economy model.
Like fellow Australian recycling startup Seabin, RecycleSmart collects data on the types of waste it receives.
It then passes those findings onto councils, enabling city planners to run education campaigns for residents confused about how to best dispose of their waste.
But Prayer sees a massive opportunity in providing that same data to businesses, given the increasing push for sustainability and traceability across the supply chain.
“We strongly believe that there’s going to be an opportunity for businesses to leverage RecycleSmart to really ‘green up’ their operations,” he said.
Prayer also touts the benefits of integrating the startup’s offerings into a business’s overall operations.
“A simple example is that we hope shopping online at The Iconic, for example, if you spend more than $100 with them, they give you [cash back] to spend with RecycleSmart for your next pickup.”
Pointing to businesses like meal delivery service HelloFresh, which prioritises recyclable packaging, Prayer said ensuring packaging circularity is a powerful customer retention tool.
“That is going to be the game changer,” he added.
“I mean, I’ve invested basically my professional life into believing that result is definitely achievable.”
Participants in the equity crowdfunding raise are largely existing supporters, Prayer said, suggesting that building that engaged fanbase — and proving their demand for recycling solutions — could build RecycleSmart’s appeal to brands.
The $1 million raise comes at a unique point for the equity crowdfunding sector, which has seen a 26% year-on-year decrease in funding value through choppy economic conditions.
However, Birchal co-founder Matt Vitale today pointed to RecycleSmart, among others, as recent success stories.
“We are a couple of weeks into the new financial year and Birchal has achieved over $6 million in funding volume across five campaigns already, more than double compared to this time last year,” he wrote on social media Monday.
The number of successful equity crowdfunding rounds over the last year also surpassed the number of ASX IPOs, Vitale added.