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Morgan Stanley-backed Recykal raises nearly $10 Mn in ongoing round

EntrackrEntrackr · 1y ago
Morgan Stanley-backed Recykal raises nearly $10 Mn in ongoing round
Medial

B2B waste management and recycling marketplace Recykal has raised Rs 80 crore from 360 One Large Fund. The fresh investment came after a hiatus of more than two years for the Morgan Stanley-backed firm. The board at Recykal has passed a special resolution to allot 35,476 Seres D CCPS at an issue price of Rs 22,556 each to raise Rs 80 crore (approximately $10 million), its regulatory filing accessed from the Registrar of Companies shows. Founded in 2016, Recykal helps businesses to fulfill their EPR targets, become plastic-neutral, dispose of IT assets, source recyclable materials, and track and trace industrial waste flow. According to TheKredible estimates, the company has been valued at around Rs 1,180 crore or $144 million (post-money). Caveat: This tranche appears to be a part of a larger round and the valuation may vary after the completion. Recykal has declined to comment on the story. As of now, Recykal has raised around $38 million across several rounds including a $22 million round led by Morgan Stanley India and Circulate Capital in January 2022. Before this round, Morgan Stanley was the largest stakeholder with 27.05% in the company followed by Circulate Capital and Triton Fund. Its co-founders including Abhay Deshpande, Abhishek Deshpande, and Abhishek Deshpande cumulatively command 40.03% of the company. Recykal demonstrated impressive financial performance which was evident from its scale that grew 3.92X to Rs 745 crore in FY23 from Rs 190 crore in FY22. The losses for the Hyderabad-based firm stood at Rs 25.7 crore during the fiscal year ended in March 2023.

Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31%

EntrackrEntrackr · 4m ago
Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31%
Medial

Morgan Stanley-backed Recykal’s scale dips in FY24; losses spike 31% While Recykal, a B2B waste management marketplace, achieved 4X year-on-year growth in FY23, the firm could not maintain the same momentum in FY24, with its gross revenue declining by nearly 5%. Moreover, the company’s losses spiked 31% in the same period. Recykal’s gross revenue declined by 4.4% to Rs 712 crore in FY24 from Rs 745 crore in FY23, its consolidated financial statements sourced from the Registrar of Companies show. Founded in 2016, Recykal offers digital solutions for waste management, assisting businesses in meeting EPR targets, sourcing recyclables, and tracking industrial waste. Its services include EPR certificates, plastic neutrality, ITAD, a digital marketplace, and circularity solutions. Gross collections from scrap and waste sales contributed 85% of the gross revenue, which declined 7.4% year-on-year to Rs 608 crore in FY24 from Rs 657 crore in FY23. The remaining revenue was generated from the sale of sustainability services, including EPR certificates. Recykal also added Rs 6 crore interest on deposits and gain on the sale of current investments which tallied the overall income to Rs 718 crore in the last fiscal year, from Rs 748 crore in FY23. For the waste management firm, scrap and waste procurement remained the largest cost center, making up 89.5% of total expenses. With a slight decline in scale, this cost decreased by 3.6% to Rs 673 crore in FY24. Employee benefits surged by 43.3% to Rs 43 crore in FY24, including Rs 3.2 crore in ESOP costs (non-cash). Provisions for doubtful debts, legal expenses, rent, communication, logistics, and other overheads drove total expenditure to Rs 752 crore in FY24. The decline in scale led Recykal to record a 30.8% increase in losses, standing at Rs 34 crore in FY24, up from Rs 26 crore in FY23. Its Return on Capital Employed (ROCE) stood at -15.66%, while its EBITDA margin was -4.04%, with an expense-to-revenue ratio of Rs 1.06. By the end of FY24, Recykal reported total current assets of Rs 317 crore, including Rs 70 crore in cash and bank balances. Recykal has raised over $38 million to date including its $13 million round led by 360 ONE Asset Management. According to the startup data intelligence platform TheKredible, Morgan Stanley is the largest external stakeholder followed by 360 One Asset Management.

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