Startup Deep Dive : Recykal — revenue fell and losses grew the same year it was valued at $280 million

Recykal booked Rs 712 crore ($74 million) in gross revenue in FY24 – and its losses still grew 30.8% that same year. The company runs India’s largest EPR compliance marketplace for plastic, e-waste and battery scrap, yet in June 2026 investors valued it at a reported $280 million even as its topline shrank.

That contradiction – falling revenue, rising losses, rising valuation – is the story of how a regulation, not a consumer habit, built a nine-figure company out of the scrap trade. Recykal did not invent recycling in India. It digitised the paperwork that a 2016 law made mandatory, connected it to a marketplace of kabadiwalas and recyclers that already existed, and survived a earlier, near-fatal attempt to sell the same idea directly to households.

Quick facts

What they do

Recykal runs a digital marketplace that connects the people who generate waste – factories, retailers, consumer brands – with the people who already collect and process it in India’s informal scrap economy: kabadiwalas, aggregators, and licensed recyclers. On top of that marketplace sits a compliance layer, EPR Loop, that helps roughly 650-plus brands meet their Extended Producer Responsibility obligations under Indian law by tracking plastic, e-waste, tyre and battery scrap from pickup to final recycling and issuing the paperwork regulators require. A third product, a digital deposit refund system, pays consumers small amounts to return packaging at scale, piloted first in Uttarakhand. The customer, in effect, is twofold: brands that must prove their waste was recycled, and the recyclers and collectors who need buyers and working capital.

The origin

Abhay Deshpande had already built and sold one company before Recykal. His previous venture, MartJack, a SaaS platform that helped brick-and-mortar retailers sell online, was acquired by Singapore’s Capillary Technologies in 2015, in what was reported at the time as one of South East Asia’s larger SaaS acquisitions. Deshpande left Capillary in December 2016 and, rather than start with a product, spent close to two years embedded with the people who actually move waste in Indian cities – scrap dealers, aggregators, ragpickers – to understand how the trade worked before writing a line of code.

What he found was not a lack of recycling capacity but a lack of accountability. Waste already moved through an enormous informal network of kabadiwalas and scrap dealers; nobody could prove where it ended up, and nobody could formalise or finance that network because none of it was documented. He was joined as co-founders in early 2017 by his cousin Abhishek Deshpande, who came from a hospitality background, and Anirudha Jalan, an investment banker and angel investor, along with Ekta Narain and Vikram Prabakar. The founding bet was that digitising the paper trail of waste – who collected it, how much, where it went – could turn an invisible, informal trade into something brands, financiers and regulators could all deal with.

The struggle years

The first product was not the B2B marketplace Recykal is known for today. It was Uzed, a consumer app that paid households in Hyderabad and Pune directly for their waste, launched not long after the company’s 2016-17 founding. It grew: by 2019 roughly 500,000 consumers had downloaded it, and it was fulfilling around 1,000 orders a day. By the usual startup scorecard, that looked like traction.

It was also losing money on every single order. Picking up household waste meant a rider travelling to a home, then spending 45 to 60 minutes weighing and sorting a small, mixed, low-value load – cardboard here, a few plastic bottles there – before it was worth anything to a recycler. The unit economics never closed at that volume, and by 2019 the founders concluded the consumer model could not scale into a business. It was a near-death moment dressed up as a growth story: half a million downloads, and a cost structure that made every one of them a liability.

A second, quieter struggle followed inside the pivot itself. Even after Recykal rebuilt around business customers and EPR compliance, profitability did not arrive with scale. The company was modestly profitable in FY22, posting a Rs 1.26 crore profit on Rs 190.5 crore of revenue, then slid into a Rs 25.7 crore loss in FY23 as revenue almost quadrupled to Rs 745 crore – and losses widened again to Rs 34 crore in FY24 even as revenue fell. Scale, in Recykal’s case, kept arriving well ahead of the margin to support it.

The turning point

The turning point was regulatory, and it landed while Uzed was still bleeding cash. India’s plastic waste rules introduced Extended Producer Responsibility in 2016, and by 2019 the compliance burden it created for consumer brands had become real and unavoidable: any company generating plastic packaging waste now had to prove it was collecting and recycling a defined share of it, or face penalties. Brands did not know how to do this, and had no relationship with the informal recyclers who actually processed the material. Recykal already had a marketplace linking those recyclers to buyers; it simply pointed the same infrastructure at a new customer – the brand that needed an EPR certificate – instead of the household that wanted fifty rupees for its bottles.

The numbers either side of that switch are stark. Rapidue Technologies, the entity behind Recykal, reported revenue of about Rs 1.8 crore in FY19, the year Uzed was still the main product. A year later, in FY20, revenue had jumped to roughly Rs 21.2 crore – close to a twelve-fold increase – as the EPR-driven B2B marketplace took over. Deshpande later summed up the shift in a line that made the regulatory analogy explicit: EPR was to waste management what demonetisation had been to fintech – a policy shock that forced an entire industry online overnight.

The money behind it

Recykal’s capital table reads like a slow build rather than a single marquee round, with climate-focused and strategic investors layered in over five-plus years:

• 2019, Pre-Series A: approximately $2 million raised, an early bet on the just-launched B2B pivot.
• December 2020, Series A: undisclosed amount led by Circulate Capital, a fund set up specifically to back ocean-plastic and circular-economy ventures in South and Southeast Asia – the round that validated the EPR pivot to outside capital.
• January 2022: $22 million led by Morgan Stanley India, with returning backers Circulate Capital and Murugappa Group executives Vellayan Subbiah and Arun Venkatachalam – the round that brought a global institutional name onto the register and, per company disclosures at the time, took cumulative equity raised to about $26 million.
• April 2024, pre-Series B: $13 million (Rs 110 crore) led by 360 ONE Asset Management, with Morgan Stanley, Circulate Capital, Ajay Parekh and the Murugappa executives following on; the company put cumulative funding at $35 million at this point.
• June 2026, Series D / bridge: $23 million (Rs 217 crore: $17.6 million primary plus $5.4 million secondary), led by Ajay Parekh, Vice Chairman of Pidilite Industries, with Biological E, 360 ONE, Trinity Combine and Strat Venture participating – the round in which Circulate Capital fully exited, reportedly realising close to 5x its original investment.

What each backer changed: Circulate Capital’s 2020 entry gave Recykal a specialist circular-economy credibility that helped it raise from mainstream investors later; Morgan Stanley’s 2022 cheque signalled the business was investable by global institutional standards, not just impact capital; and Ajay Parekh’s 2026 round brought in an industrial-chemicals insider whose own company, Pidilite, is itself a large generator of packaging waste and a natural EPR customer. Reported cumulative funding differs by source: Recykal’s own April 2024 disclosure put it at $35 million, while data aggregator Tracxn lists lifetime funding at $59 million across eight rounds as of 2026 – the gap likely reflects how each source counts undisclosed or secondary-heavy rounds. The June 2026 round’s approximately $280 million post-money valuation is Entrackr’s estimate from regulatory filings; it has not been separately confirmed by the company.

How it makes money

Recykal’s revenue has two very different characters sitting inside one number, and the split explains most of its margin problem:

• Sale of scrap and waste materials – Recykal buys plastic, metal, paper and e-waste scrap from its network of collectors and aggregators and resells it to recyclers and processors, essentially running a trading desk for secondary raw materials. This is a low-margin, high-volume, working-capital-heavy business: it made up Rs 608 crore, or about 85%, of gross revenue in FY24 (Rs 656.5 crore, about 88%, in FY23).
• Sustainability and EPR services – Recykal charges brands for EPR compliance management: tracking their packaging waste, aggregating recycling proof from its network, and issuing the certificates brands need to show regulators. This is closer to a software and services fee than a trading margin, and it is the smaller but structurally more profitable slice: roughly Rs 88.5 crore in FY23 and an estimated Rs 104 crore in FY24.

The part people get wrong is assuming Recykal is primarily a “tech platform” business with software-like margins. In FY24, scrap and waste procurement alone cost Rs 673 crore against Rs 712 crore of gross revenue – work out the ratio and it is closer to a low-margin commodity trading operation with a compliance business bolted on, not the other way round. That is why EBITDA margin has stayed negative: -3.01% in FY23 and -4.04% in FY24, according to Entrackr’s analysis of the company’s filings.

The numbers

Read across the three years and the pattern is a scaling business, not yet a compounding one: revenue nearly quadrupled from FY22 to FY23 on the back of the EPR pivot maturing, then contracted 4.4% in FY24 – a rare reversal for a company that had marketed itself on hockey-stick growth – while losses kept widening in both loss-making years. Cash reserves stood at Rs 70 crore at the end of FY24, out of Rs 317 crore in total current assets, per Entrackr’s review of the filings.

Where the money comes from

• By revenue line, FY24: scrap and waste sales, Rs 608 crore (about 85%); sustainability/EPR services, roughly Rs 104 crore (about 15%).
• By revenue line, FY23: scrap and waste sales, Rs 656.5 crore (about 88%); sustainability services, Rs 88.5 crore (about 12%).
• By geography: Recykal is India-only in its disclosed financials, headquartered in Hyderabad with offices in Mumbai, Pune and Bangalore; company materials have described international expansion (the April 2024 and June 2026 rounds both cited international growth as a use of funds), but no non-India revenue has been separately broken out in public filings.
• By network reach: the company has said its platform connects more than 1,000 businesses, roughly 500 aggregators, 150-plus recyclers, and thousands of individual kabadiwalas and ragpickers across most Indian states – a scale claim from company disclosures, not an audited figure.

The surprise is not which segment earns more – scrap trading dominating a “sustainability company’s” revenue is now a familiar story in this sector – but how thin the compliance side still is in absolute terms. A business built to solve a regulatory problem for hundreds of large brands generates roughly a seventh of group revenue from doing exactly that; the rest is still a commodity resale operation wearing a green label.

The risks

• Commodity-margin exposure: because 85% of revenue (FY24) is scrap procurement and resale, Recykal’s margins move with global secondary-material prices, not with any moat it controls – scrap procurement cost Rs 673 crore against Rs 712 crore of revenue in FY24, leaving almost no room for error (Entrackr, FY24 filings).
• Regulatory concentration: a large share of the higher-margin business exists only because EPR law requires it. EPR certificate prices in India are themselves capped and adjusted by a CPCB pricing oversight mechanism (reported bands of roughly Rs 0.5-2 per kg depending on plastic category, reset quarterly) – meaning a policy change to pricing, targets or enforcement could reprice Recykal’s most profitable line overnight (SORT Consultancy, 2025).
• Sector-wide certificate integrity risk: the EPR credit market Recykal operates in has a documented trust problem – a CPCB audit reportedly found close to 6 lakh (600,000) suspect EPR certificates, and one investigation found 31 of 41 government-approved e-waste plants examined were non-operational “ghost” facilities issuing credits for waste never actually processed (Envirosense, 2026). A regulatory crackdown that resets verification standards across the industry would raise compliance costs for every platform in the space, Recykal included, even where its own network is not implicated.

The takeaway

Recykal’s most useful lesson is not about recycling at all. It is about waiting for the state to define the market before you try to sell into it. The founders spent two years and one failed consumer product discovering that nobody would pay enough, often enough, to make household waste collection work as a business – not because people did not care, but because voluntary recycling has no natural buyer willing to fund the last mile. What changed everything was not better marketing or a cheaper app; it was a law that forced 650-plus brands to become buyers whether they wanted to or not. The company that wins in a policy-created market is rarely the first to spot the regulation – it is the one that already has the unglamorous infrastructure, in Recykal’s case a marketplace of kabadiwalas and recyclers, sitting ready when the mandate lands.

Frequently asked questions

What does Recykal actually do?

Recykal runs a B2B marketplace connecting waste generators and collectors with recyclers, and separately operates an EPR compliance platform that helps consumer brands track and document the recycling of their packaging, e-waste and battery waste to meet Indian regulatory requirements.

Who founded Recykal, and when?

Recykal was founded in Hyderabad in 2016-17 by Abhay Deshpande, who previously built and sold MartJack to Capillary Technologies in 2015, along with co-founders Abhishek Deshpande, Anirudha Jalan, Ekta Narain and Vikram Prabakar.

Is Recykal profitable?

No. Recykal was marginally profitable in FY22 (a Rs 1.26 crore profit) but has posted losses since, widening from Rs 25.7 crore in FY23 to Rs 34 crore in FY24 even as revenue dipped 4.4% that year, according to Entrackr’s review of its regulatory filings.

How much funding has Recykal raised, and what is it worth?

Recykal has raised money across at least five rounds since 2019, from backers including Circulate Capital, Morgan Stanley India, 360 ONE and, most recently, Pidilite Vice Chairman Ajay Parekh. Cumulative funding is reported at $35 million by the company as of April 2024 and at $59 million by data aggregator Tracxn as of 2026; a June 2026 round valued it at a reported $280 million post-money, per Entrackr’s estimate from regulatory filings.

How does Recykal make money?

Most of its revenue – about 85% in FY24 – comes from buying and reselling scrap and waste materials, a low-margin trading business. The rest comes from fees charged to brands for EPR compliance management and certification, a smaller but structurally higher-margin line.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Entrackr, “Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31%,” 2025
• Entrackr, “Morgan Stanley-backed Recykal’s scale jumps nearly 4X to Rs 745 Cr in FY23,” September 2023
• Entrackr, “Update: Morgan Stanley-backed Recykal raises $23 Mn in bridge round,” June 2026
• Entrackr, “Update: Morgan Stanley-backed Recykal raises nearly $13 Mn,” April 2024
• Inc42, “Morgan Stanley-Backed Recykal Slips Into The Red, Posts INR 25.7 Cr Loss In FY23,” 2023
• YourStory, “Funding alert: Morgan Stanley leads $22M round in Recykal,” January 2022
• Outlook Business, “Hyderabad-Based Recykal Raises $13 Million Funding In Pre-Series B Round,” April 2024
• Indian Retailer, “Funding Alert: Recykal Raises $23 Mn Bridge Funding To Accelerate Circular Economy Growth,” June 2026
• Forbes India, “Uber for trash: How Recykal is cleaning up the mess,” 2021
• Wikipedia, “Recykal,” accessed September 2026
• Tracxn, “Recykal – Company Profile, Team, Funding, Competitors & Financials,” accessed September 2026
• SORT Consultancy, “EPR Certificates and Credit Trading 2025: India’s Circular Economy,” 2025
• Envirosense, “EPR Credits in India: Growth, Risks, and Regulatory Action,” 2026

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