Startup Deep Dive : The Kabadiwala — revenue fell 21.5% the year after its biggest funding round

In FY25, The Kabadiwala — the Bhopal startup that set out to turn India’s neighbourhood scrap dealers into a digital, trackable network — booked revenue of ₹10.1 crore (~$1.05 million at ₹96 to the dollar), according to Inc42 Datalabs’ reading of its regulatory filings. That number is a fall, not a rise: it is down 21.5% from ₹12.9 crore the year before, and it came with a net loss of ₹2.7 crore.

The contradiction is worth sitting with. This is a company that has been written up as a poster child for India’s circular economy, has a listed FMCG contract manufacturer as a shareholder, and closed a $2 million round from an institutional investor in 2022 — yet its most recent filed numbers show it shrinking. What happened between the funding headlines and the filing cabinet is the real story of India’s best-known “digital kabadiwala”.

Quick facts

What they do

The Kabadiwala runs an app that lets households and businesses book a free doorstep pickup for recyclable waste — newspaper, metal, plastic, e-waste and more than 40 other categories — and get paid on the spot at a rate shown upfront in the app, using an electronic scale rather than a guessed weight. Behind that consumer layer sits a second business: the company also sells waste-management and Extended Producer Responsibility (EPR) compliance services to corporates, and runs Material Recovery Facilities (MRFs) on behalf of city governments. In effect, it is trying to formalise three sides of the same informal trade at once — the household that wants to sell scrap, the kabadiwala who collects it, and the corporate or municipal body that has to prove the waste was actually recycled.

The origin

The idea traces back to a mundane annoyance. Anurag Asati, an engineering student at the Oriental Institute of Science and Technology in Bhopal, could not get a local scrap dealer to show up and take away a pile of household recyclables. The local kabadiwala trade ran on word of mouth, cash, and rates nobody could verify — if a dealer turned up at all. Asati brought the problem to Kavindra Singh Raghuwanshi, who had taught him in college, and the two decided the fix was not to replace the kabadiwala but to put a website, and later an app, between the household and the collector: transparent live rates, a scheduled pickup, and a digital record of what was collected. The venture began operating in February 2013 under the tagline “why to waste when you can earn and donate,” and was formally incorporated as Asar Green Kabadi Private Limited the following year, in 2014, per its corporate identification number on record with the Registrar of Companies.

The struggle years

For a company now cited in circular-economy case studies, its early years were unglamorous and largely unfunded. From its 2013 founding to 2019, The Kabadiwala grew on bootstrapped revenue and founder capital alone — six years without a single institutional cheque. Its first outside money did not arrive until 10 April 2019, and even then it was a modest angel round of roughly ₹3 crore (about $434,660), raised from a handful of individual backers rather than a venture fund. For an operationally heavy business — vehicles, weighing scales, pickup staff, working capital to pay households on the spot before reselling scrap in bulk — that is a thin runway to have survived on for six years.

A second, more recent setback shows up in the filings rather than in a press release. After its highest-profile funding round in November 2022, the company guided publicly toward operating in 25 to 30 Indian cities. By 2024, independent write-ups still placed it at roughly 15 cities — short of that target — and its own financial trajectory had turned downward: FY25 revenue of ₹10.1 crore was 21.5% below FY24’s ₹12.9 crore, the year closed with a ₹2.7 crore loss, and headcount had fallen to just 16 people by August 2025, a 20% year-on-year decline, according to Tracxn. A company that raised its largest round on the promise of near-doubling its city count instead ended up smaller by most measures than it was two years earlier.

• 2013–2019: six years of bootstrapped operations with no institutional funding (company timeline; Tofler incorporation record)
• April 2019: first angel round of roughly ₹3 crore ($434,660) — the company’s only outside capital for its first six years (Inc42 Datalabs)
• FY24 to FY25: revenue fell 21.5%, from ₹12.9 crore to ₹10.1 crore, with a ₹2.7 crore net loss (Inc42 Datalabs)
• By August 2025: headcount down to 16, a 20% year-on-year decline, against an earlier stated target of 25–30 operating cities (Tracxn)

The turning point

The hinge moment came in the second half of 2022. In September that year, The Kabadiwala was named one of ten national winners of the Swachhata Startup Challenge, a programme run by the Ministry of Housing and Urban Affairs with the French development agency AFD to back waste-management startups — a government stamp of approval, and non-dilutive capital, at a time when the company had raised barely half a million dollars in its entire history. Weeks later, on 21 November 2022, it closed a $2 million seed round led by Roots Ventures — by itself, roughly four times everything the company had raised in the preceding nine years combined. Cumulative funding jumped from around $550,000 to about $2.55 million in a matter of weeks, and the company said publicly it expected the money to take it from about 15 cities to 25–30. That round is the clear before-and-after: before it, a founder-run business surviving on angel money and grit; after it, a venture-backed company with a mandate to scale nationally. What the struggle-years numbers show is that the scaling did not fully hold.

The money behind it

• April 2019 — Angel round, ~₹3 crore ($434,660): backers included Bhushan Gajaria of Beehive Capital Advisor, Bharat Mandloi of Singapore-based ABCOM Investments, Suresh Parekh of Parekh Marine Transport, Naveen Reddy (then Unilever’s supply-chain director) and Vishal Thaker — brought early operating and FMCG-supply-chain credibility rather than a large cheque (Inc42 Datalabs; YourStory company profile)
• September 2022 — Government grant, Swachhata Startup Challenge: one of ten winners nationally under a Ministry of Housing and Urban Affairs and AFD programme; non-dilutive validation just before the seed round (YourStory, September 2022; Business Standard, September 2022)
• 21 November 2022 — Seed round, $2 million: led by Roots Ventures, the company’s largest single round to date and the capital behind its national-expansion push (Inc42 Datalabs; Tracxn)
• Since 2023 — Strategic investment from Hindustan Foods Limited: the BSE- and NSE-listed FMCG contract manufacturer took a minority stake, with management telling investors it views PET recycling as a “sunrise sector” with cross-selling potential to its own customer base — a strategic rather than purely financial backer (Hindustan Foods investor commentary, cited by Multibagg, 2026)
• August 2025 — an additional, undisclosed seed round: still under the existing Roots Ventures relationship, per Tracxn’s funding history, with no public amount disclosed
• Total raised to date: about $3.33 million (~₹32 crore) across six rounds from 23 investors since 2013 — a small base by venture standards for a business this operationally heavy (Crunchbase; Tracxn)

How it makes money

The consumer-facing transaction is the part everyone sees, and the part that carries the thinnest margin. The Kabadiwala buys recyclables from households and small businesses at a published live rate, using electronic weighing to keep the transaction transparent, and then earns the spread when it resells that material in bulk to paper mills, plastic recyclers, metal smelters and glass processing units. That spread is a volume business: it depends on moving tonnes of material through a logistics chain of pickup staff and vehicles, not on charging the household anything.

Underneath that sits a second, less visible layer. A separate partner app called Scrapr digitises the workflow for independently owned kabadiwalas — e-weighing, route planning and transparent pricing — turning informal collectors into a partner network rather than employees. The company says it has onboarded more than 5,000 kabadiwalas this way and directly supports over 750 waste pickers, whom it says earn 30–40% more than they would in the unorganised market (Sankalp Forum, 2024).

The part outsiders tend to get wrong is treating this as a consumer app business, like a scrap-collection equivalent of a ride-hailing app. The company describes itself as a “SaaS platform” for organising the waste sector, and its named client list — Adani, Reliance, Tetra Pak, Sleepwell and Nippo among the more than 500 corporates it says it works with — points to a second, likely higher-margin revenue line: selling EPR compliance and circular-economy services to brands that are legally obliged to fund plastic and e-waste recycling, plus running MRFs under municipal contracts (it operates four MRFs in Bhopal alone). The consumer app is the acquisition and data layer; the compliance and government-contract business is where the more defensible revenue increasingly sits.

• Consumer collection: doorstep purchase of scrap across 40-plus categories, margin from the buy-resell spread (thekabadiwala.com)
• Partner network (Scrapr app): digitises 5,000+ onboarded kabadiwalas and 750+ waste pickers, a SaaS-like layer over the informal trade (Sankalp Forum, 2024)
• Corporate EPR and circular-economy services: sold to 500+ named corporates including Adani, Reliance, Tetra Pak, Sleepwell and Nippo (Sankalp Forum, 2024)
• Government contracts: manages four Material Recovery Facilities in Bhopal (thekabadiwala.com/about-us)

The numbers

Only two years of hard, cited revenue figures were available through the registrar-filing aggregators checked for this piece; earlier fiscal years appear only as broad, not-useful ranges (Tofler put FY23 revenue somewhere between ₹1 crore and ₹100 crore) or as a bare growth percentage without a base figure. Rather than estimate a number for those years, this table covers only the two years with disclosed figures.

• FY24 revenue: ₹12.9 crore (Inc42 Datalabs, citing the company’s regulatory filing)
• FY25 revenue: ₹10.1 crore, down 21.5% from FY24 (Inc42 Datalabs)
• FY25 total expenses: ₹12.8 crore against revenue of ₹10.1 crore, producing the year’s loss (Inc42 Datalabs)
• FY25 net loss: ₹2.7 crore, a net margin of roughly -26.6% (Inc42 Datalabs)
• FY25 total assets: ₹3.7 crore (Inc42 Datalabs) — Tracxn’s independent estimate places FY25 revenue in a ₹10–50 crore band, consistent with, and anchored at the low end by, Inc42’s exact figure
• FY22: revenue reported to have grown 196.7% year-on-year, per Tofler’s reading of the company’s Registrar of Companies filing — the clearest pre-2022-funding growth marker available, though the absolute base figure is not disclosed

Where the money comes from

The company does not publish a revenue split by segment, so the picture here is built from the scale of each channel rather than its share of revenue — but the shape is telling on its own.

• Consumer app: more than 400,000 registered users across roughly 15 cities (Sankalp Forum, 2024)
• Corporate/EPR clients: 500+ named corporates, including Adani, Reliance, Tetra Pak, Sleepwell and Nippo (Sankalp Forum, 2024)
• Partner network: 5,000+ onboarded kabadiwalas and 750+ directly supported waste pickers (Sankalp Forum, 2024)
• Government contracts: four Material Recovery Facilities run in Bhopal (thekabadiwala.com/about-us)
• Geography: direct, company-run operations concentrated in Bhopal, Indore and Lucknow, with other cities served through the partner-kabadiwala model rather than company-owned trucks and staff (Sankalp Forum, 2024)

The surprise is that a company known to the public as a scrap-pickup app has a client roster dominated by large listed corporates and city governments rather than households. That suggests its more durable revenue increasingly looks like a business-to-business services line — compliance reporting and contracted waste handling — wrapped in a consumer-facing brand that does the harder job of sourcing the material in the first place.

The risks

• Margin and scale risk: FY25 revenue fell 21.5% to ₹10.1 crore while expenses of ₹12.8 crore did not fall in step, producing a ₹2.7 crore loss. In a business built on thin buy-resell spreads and volume, a revenue dip flows almost directly into the loss line rather than being absorbed by fixed-cost leverage (Inc42 Datalabs, FY25).
• Regulatory dependency on EPR rules: a meaningful part of the corporate revenue line is built explicitly around helping brands meet India’s Extended Producer Responsibility obligations for plastic and e-waste. If EPR enforcement is diluted, delayed or its credit pricing collapses, the commercial reason for large corporates to keep paying disappears, even though the underlying collection infrastructure stays the same (thekabadiwala.com/about-us).
• Thin capital base and an execution gap: total funding of about $3.33 million since 2013 is small for a business that needs vehicles, working capital and headcount to grow, Roots Ventures is the only institutional lead across its two largest rounds, and headcount had fallen to 16 by August 2025 — down 20% year-on-year — even as the company remained at roughly 15 cities against a stated post-2022 target of 25–30 (Tracxn; Sankalp Forum, 2024).

The takeaway

The lesson sitting inside The Kabadiwala’s numbers is not really about waste, or even about India. It is about what happens when a founder sets out to fix a consumer-facing annoyance and discovers, years in, that the money was never really in that transaction. The doorstep pickup got people’s attention, brought in funding rounds and made for good press, but the filings suggest the durable value migrated to the layer built on top of it — the compliance reporting, the government contracts, the software that makes an informal network auditable. Digitising a trust-poor, cash-based trade run by millions of small operators is a decades-long infrastructure project, not a growth-app story, and the numbers punish anyone who scales the consumer front end faster than the underlying economics can support.

Frequently asked questions

What does The Kabadiwala do?

It runs an app-based doorstep scrap-collection service for households and businesses, alongside a separate partner app for independent kabadiwalas, corporate Extended Producer Responsibility (EPR) compliance services, and Material Recovery Facility (MRF) management contracts with city governments.

Who founded The Kabadiwala and when?

Anurag Asati and his college teacher Kavindra Singh Raghuwanshi started the service in Bhopal in February 2013, after Asati struggled to find a reliable local scrap dealer; the business was incorporated as Asar Green Kabadi Private Limited in 2014.

How much funding has The Kabadiwala raised?

About $3.33 million across six rounds from 23 investors since 2013, according to Crunchbase and Tracxn data, including a ₹3 crore angel round in April 2019 and a $2 million seed round led by Roots Ventures in November 2022.

Is The Kabadiwala profitable?

No. Its FY25 revenue of ₹10.1 crore came with total expenses of ₹12.8 crore, producing a net loss of ₹2.7 crore, and revenue itself was down 21.5% from the previous year, per Inc42 Datalabs.

Is Hindustan Foods Limited a shareholder in The Kabadiwala?

Yes. The listed FMCG contract manufacturer has taken a minority stake, describing PET recycling as a sunrise sector with cross-selling potential for its own customer base, though the exact stake size and investment amount have not been confirmed through the sources reviewed for this piece.

Sources

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

• Inc42 Datalabs — The Kabadiwala: Funding, accessed September 2026
• Inc42 Datalabs — The Kabadiwala: Financials, accessed September 2026
• Inc42 Datalabs — The Kabadiwala company profile, accessed September 2026
• Tracxn — The Kabadiwala company profile, accessed September 2026
• Tofler — Asar Green Kabadi Private Limited company and financial filing record, accessed September 2026
• Sankalp Forum — “From college frustration to organising India’s waste economy: #SankalpChangemakers features Anurag Asati, Co-Founder, The Kabadiwala,” 2024
• The Kabadiwala — About Us, thekabadiwala.com, accessed September 2026
• CrazyEngineers — Interview with Anurag Asati, Co-Founder, TheKabadiwala.com
• YourStory — The Kabadiwala Company Profile: Funding & Investors, accessed September 2026
• Crunchbase — The Kabadiwala organization profile, accessed September 2026
• YourStory — “10 startups receive government grants under Swachhata Startup Challenge,” September 2022
• Business Standard — “Swachhata Startup Challenge winners receive Rs 25 lakh grant from MoHUA and AFD,” September 2022
• Multibagg — “Hindustan Foods Limited: Sustained Growth and Strategic Expansion in Q3 & 9MFY26,” 2026
• Trading Economics — USD/INR exchange rate, 18 September 2026

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