Morgan Stanley-Backed Recykal Slips Into The Red, Posts INR 25.7 Cr Loss In FY23

Morgan Stanley-backed waste management marketplace Recykal slipped into the red in the financial year ending March 31, 2023. The Hyderabad-based startup reported a net loss of INR 25.7 Cr in the financial year 2022-23 (FY23) as against a net profit of INR 1.2 Cr in FY22. 

Recykal had posted a net profit of INR 1.3 Cr in FY21. 

The startup’s operating revenue jumped 291% to INR 745.1 Cr in FY23 from INR 190.4 Cr in the previous year. Including other income, Recykal reported a total revenue of INR 747.6 Cr in FY23 from INR 190.7 Cr in FY22.

On the expenditure front, the startup’s total expenses surged 308% to INR 773.4 Cr in FY23 from INR 189.5 Cr in FY22. 

Purchase of stock-in-trade accounted for the biggest chunk of expenditure. Recykal spent INR 698.4 Cr for procuring recyclable waste in FY23, a 325.2% jump from INR 164.2 Cr in the previous fiscal year. 

Employee benefit expenses rose 123% to INR 29.6 Cr in FY23 from INR 13.2 Cr in the previous year. Employee benefit expenses mostly comprise employee salaries, PF contribution, gratuity, and other employee welfare benefits. 

The startup’s transportation distribution expenses more than tripled to INR 23.7 Cr during the year under review from INR 7.2 Cr in FY22.

Founded in 2016 by Abhay Deshpande, the Hyderabad-based startup operates a B2B marketplace for waste management. It connects large waste generators such as industries, organisations, colleges to processors and other players in the segment to address the demand-supply mismatch. Recyclers can buy waste from across the country through the markeplace, while Recykal manages logistics and documentation. It also provides cloud-based solutions to customers. 

Last year, Recykal bagged $22 Mn in a funding round led by Morgan Stanley. The round also saw participation from its existing investors – Singapore-based Circulate Capital, Vellayan Subbiah, and Arun Venkatachalam. Prior to that, it raised $4 Mn in a seed funding round in 2020. 

The startup competes against the likes of Attero, Banyan Nation, plastic waste upcycling startup Lucro Plastecycle, and Sampurna(e)arth.