Cell-Phone Recycling Company Gets $15 Million Investment Infusion

Aug 26, 2008 3:34 PM

Cell phones may seem disposable, as teens and trendsetters alike ditch last year’s model for the latest and greatest technology. But all of those old handsets have to go somewhere, and ReCellular is stepping up its efforts to recycle used phones thanks to $15 million in Series A Preferred Stock financing courtesy of Investor Growth Capital.

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ReCellular is on track to process more than 6 million phones in 2008. It plans on expanding its operations by opening new facilities, consolidating processing facilities, and significantly increasing the number of its Michigan employees. It also will evaluate strategic acquisitions of other electronics recycling businesses.

“We processed almost 5000 phones in our first year of business,” said Chuck Newman, CEO of ReCellular. “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.”

The company also plans on rapidly increasing its phone collections, focusing on direct-to-consumer and trade-in partnerships as well as by building consumer awareness of the benefits of recycling. According to a study by Nokia, only 3% of users recycle their old handsets, and half of all users aren’t even aware their phones can be recycled. Yet ReCellular’s revenues have increased an average of 25% over the past eight years.

“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.”

There are approximately 3.3 billion cell-phone users worldwide and 130 million phones retired in the U.S. each year. Add these factors to consumers’ growing awareness of environmental issues and the increasing sales of new wireless handsets, and ReCellular and IGC both expect some significant growth in the future.