ReCellular, a Dexter, Mich.-based cell phone recycling firm, has raised $15 million in Series A funding from Investor Growth Capital.
ReCellular (http://www.recellular.com), the world's leading cell-phone recycling firm, announced today that Investor Growth Capital (IGC) (http://www.investorgrowthcapital.com) is investing $15 million in a Series A Preferred Stock financing. The investment adds a growing clean-tech company to IGC's portfolio, and will enable ReCellular to expand operations and accelerate its rapid revenue growth.
“This investment marks a milestone in ReCellular's history,” says ReCellular CEO Chuck Newman. “It marks our transition from a successful start-up in the emerging field of cell-phone recycling into the undisputed global leader in electronics sustainability.”
Newman has been a pioneer in cell-phone recycling since 1991. ReCellular has experienced explosive growth by capitalizing on two convergent trends: consumers' growing awareness of environmental issues, and the increasing sales of new wireless handsets.
As a result, ReCellular's revenues have increased an average of 25 percent for the past eight years. Today, the company is the leading collector, recycler and refurbisher of cell phones in the world. In 2008, the company is on track to process more than 6 million phones — more than the combined population of
“Our goal was to develop a profitable company that was socially and environmentally responsible,” says Newman. “Through the dedication of a talented team of people, ReCellular has exceeded all expectations. With IGC's support and investment, we will dramatically expand the company and set the standard for success in electronics-sustainability and clean-tech operations.”
IGC Investment objectives:
For IGC, the investment in ReCellular is part of the investment firm's “clean-tech” investing practice. The clean-tech sector is one of the fastest-growing sectors of the market; according to the National Venture Capital Association, investment in clean-tech operations has increased ten-fold over the past 5 years, from $235 million in 2003 to $2.6 billion in 2008.
“We see tremendous growth potential in ReCellular,” says Albert Kim, Vice President of IGC. “They have revolutionized the electronics-sustainability industry by providing a convenient solution for consumers to recycle their used handsets, while at the same time extracting enough value from these phones to build a successful business. We have investigated many clean-tech companies, including many in the cell phone recycling arena, and we felt that ReCellular was clearly the world's most promising cell phone reuse and recycling firm.”
IGC is the wholly owned venture capital arm of Investor AB, the largest listed industrial holding company in the Nordic region. IGC invests in high-quality, growth-oriented companies in North America, Europe and
IGC will invest $15 million in ReCellular. In connection with the investment, Noah Walley and Albert Kim will join ReCellular's board of directors. IGC will help realize ReCellular's expanded business plan by leveraging their collective experience in building and developing world-class companies and by accessing their unique, global relationship network.
“We chose to partner with IGC because of their deep knowledge of the sector, their experience with growth-stage companies, and the value they can bring through rich networks in the U.S., Europe, and Asia,” says Newman.
XMS Capital Partners served as exclusive financial advisor to ReCellular in connection with this transaction.
ReCellular Growth Objectives
According to a recent study released by Nokia, only three percent of mobile-phone users recycle their old handsets, and half of wireless users are not aware that cell phones can be recycled. With an estimated 3.3 billion cell-phone users worldwide, and 130 million phones retired in the U.S. every year, this study illustrates the opportunity for significant growth in the global cell-phone reuse and recycling market.
ReCellular plans to capitalize on this opportunity to expand the reach and impact of the company. Among other initiatives, ReCellular plans to:
— Expand operations, opening new office facilities, consolidating processing facilities, and significantly increasing the number of Michigan employees
— Rapidly increase phone collections, focusing on direct-to-consumer and trade-in partnerships, and building consumer awareness of the benefits of cell phone recycling
— Evaluate strategic acquisitions of other electronics recycling businesses that could complement ReCellular's expertise and operations
“We processed almost 5,000 phones in our first year of business,” says Newman. “Today, we get an average of 24,000 phones — enough to fill seven mail trucks — every day, five days a week. With the support and resources of IGC, we see the potential to double the number of mail trucks delivering to ReCellular in the very near future.”