Mumbai spends Rs 3,000–4,000 crore a year to transport garbage from around the city to the dump
Image: Mexy Xavier
Mumbai is not only India’s financial and entertainment capital, it is also its garbage capital. With 9,400 tonnes of trash produced each day, the city is quickly running out of space to throw its waste. The Deonar dumping ground, in the city’s eastern suburbs, rises 60 meters high, looming over Mumbai, releasing huge amounts of methane gas, occasionally catching fire. But in these huge piles of waste, three young entrepreneurs see even bigger opportunity.
“We wanted to solve the waste problem and we feel it has to be built into an economic model,” says Debartha Banerjee, one of three co-founders of environmental solutions company Sampurn(e)arth. Banerjee, along with co-founders Ritwik Rao and Jayanth Nataraju have designed a vertically integrated and decentralised waste management system where dry waste is sorted and recycled and wet waste is transformed into biogas through composting. Working with non-profit Stree Mukti Sanghatana, the company employs over 100 waste pickers to sort and segregate trash, bringing them into the formal employment sector. The company’s philosophy is a triple bottom line: Environmental, social, and financial sustainability.
Banerjee, Rao and Nataraju founded Sampurn(e)arth in 2012, after incubating their idea at Tata Institute of Social Sciences (TISS), where they were studying social entrepreneurship. For their first project, they installed a 250 kg biogas digester on campus that turns wet waste into cooking gas, providing the institute’s kitchen one 15 kg cylinder per day. From there, they took their idea to housing societies, office parks and other institutional campuses.
The three are not just looking to make money, they hope to turn the entire waste management system on its head. “The current waste system is run more like a transportation business, where trash is picked up from around the city and then dumped in one corner,” says Banerjee. “This is not a sustainable way.”
Mumbai spends Rs 3,000–4,000 crore a year to transport garbage from around the city to the dump, most of which goes completely untreated or sorted. Banerjee wants to save the city that money, while also preventing environmental damage. Instead of treating all trash the same, Sampurn(e)arth provides customised solutions for their clients, tailoring different services based on the type and quantity of waste. The goal is to send the smallest amount of garbage to the dump as possible, and use every piece of trash to generate value.
The triple bottom line By replacing municipal waste collectors and charging clients a fee, Sampurn(e)arth faces the challenge of convincing clients to pay for a service they could otherwise get for free. To do this, the company needs to present a significant value add.
Sampurn(e)arth offers both dry waste and wet waste collection solutions to housing societies, office parks, universities and other large institutions. The company collects dry waste in trucks and brings it to their own dry waste marketplaces. Dry waste is then further separated into as many as 20 to 25 categories by certified and uniformed waste sorters and sold to recyclers, who turn trash into useful items like paper waste into stationary and tetra packs into tiles and containers.
Currently, only 27 percent of Mumbai’s solid waste is segregated, leaving a lot of money in the dump. Sampurn(e)arth acts as a scrap broker, buying and selling from waste pickers to send as much as they can to recycling plants. Clients are then provided with recycled products, or paid money for the recyclables they provide.
Overall, Sampurn(e)arth handles eight to ten metric tonnes of trash per day that would otherwise be sent to the dump. Seventy to 80 of their roughly 110 clients only use Sampurn(e)arth’s dry waste services. For those that use the wet waste services, Sampurn(e)arth designs the most fitting solution, given the quantity of waste, space on site, and wishes of the client. While most of their biogas installations have been similar in size to the 250 kg digester at TISS, the company recently installed a 5,000 kg digester in Rajkot, Gujarat.
One man’s trash… The founders’ vision is ambitiously holistic. Addressing multiple problems and working with three different revenue streams, the company is simultaneously a waste management service provider, a retailer of recycled products, a scrap dealer, and, as the company pivots to larger scale biogas projects, an energy producer.
Executing all these things requires capital. Sampurn(e)arth has shown they can do a lot with a little. Sitting in their modest office in Mumbai’s eastern suburb of Chembur, it is hard to believe how much waste the company manages. In their first round of funding in late 2015, the company raised Rs 1 crore from Intellecap’s Impact Investing Network (I3N). They first broke even a year later, four years after they began official operations. Just last month, they secured a second bridge round of funding of Rs 92 lakh, and are looking forward to a series A in the next six months. The company is keen on attracting foreign direct investment, due to high Indian interest rates, says Banerjee.
Investors in the company highlight the “humble” nature of the three founders, and their passion for the problem at hand. “When I make an investment, the biggest thing I look at is the founder,” says Sohil Shah, associate vice president of I3N. “They were persistent and really wanted to make a difference. On top of all this, they also showed a great business model.”
But passion aside, how can a company solve social woes, improve the environment, provide honest livelihoods to workers and still compete in the open market?
Sampurn(e)arth’s lofty aspirations may also be its weakness. Banerjee feels strongly that the only way to effect change in the waste sector is to tackle the system as a whole. But he says feedback from investors often warns against the danger of trying to do too much at once. “A lot of us have been worried that they are spreading themselves too thin,” says Shah. “But if you are not in all the segments, you won’t be profitable. They are trying to do too many things at the same time, but they also have a mitigation strategy, in specialising teams and hiring good people,” says Shah.
Siddharth Pansari, of Primarc investing, another of Sampurn(e)arth’s funders, thinks the vertically integrated strategy is a smart one. “They’ve designed a one point solution” to waste management, he says. “Their ability to create and deliver it together will set them apart from their competitors.”
Shah points to other consumer attitudes as perhaps the biggest challenge the company will have to tackle. “How many of us segregate waste at home? That behavioural change needs to be a part of [their business model]. That change is the crucial pinpoint,” he says.
Making waste worth it Looking ahead, Banerjee says the company is planning larger biogas installations, like that in Rajkot and larger, where they take partial ownership of the biogas digester instead of serving only a maintenance and service role, as they currently do. This would make the company an energy provider, further diversifying the industries in which they work.
Right now, the company’s three revenues streams are similar, with a third of revenues coming from sales of recycled products at the dry waste marketplace, fees paid by housing societies and corporate clients, and operation and maintenance of biogas installations.
But Banerjee thinks a move into biogas plant ownership would quickly become their biggest revenue stream. And to him, more money means they can divert more trash from the dump and employ more trash sorters. Pansari of Primarc thinks the company can turn a corner with such a large scale investment. “These kind of start-ups typically do not grow fast,” he says, referring to socially conscious enterprises. “But I think in the next in the two to three years, we can see 30-50 percent growth year on year.”
Banerjee doesn’t see slow times ahead. Already, the company grew one and half times in the first few years of operation, but they want to grow even faster. “We believe in the power of doubling,” he says. After all, there certainly is no shortage of trash to turn into treasure.