A little over three years ago, RecycleBank LLC was a promising idea that its founders hoped would be the catalyst to boost recycling and help municipalities keep materials out of landfill.
RecycleBank encourages people to recycle with reward cards they can redeem at local and national retailers. Although the company doesn't expect to be profitable until 2009, it could end up being a welcome ally to beleaguered consumer product companies, plastics and otherwise, that make disposable containers and packaging now under siege from activists and the green movement.
The reason? In virtually every municipality in which it operates, RecycleBank says participation rates have jumped from 25 percent to between 80 and 90 percent. More importantly, it says the amount of material recycled in those communities has doubled and tripled, with the average household recycling 100 pounds of materials each month, including 7 pounds of plastics mostly PET and high density polyethylene containers.
``We have a good business model that solves a major problem,'' said RecycleBank co-founder and Chief Executive Officer Ron Gonen. ``Our ultimate goal is to dramatically reduce the amount of weight that reaches landfills, creating a zero-waste society.''
Now armed with $30 million in financing secured in April from four venture capital firms New York-based RecycleBank has aggressive plans to double the number of households it serves to 200,000 by year's end, expand further across the United States and into the United Kingdom, and add additional services.
``We have been able to expand rapidly because we spent the first two years focused on how you get high recycling rates,'' Gonen said. ``Now we have the capital to capitalize on what we were doing.''
RecycleBank's financing partners are Kleiner Perkins Caulfield & Byers of Menlo Park, Calif.; RRE Ventures LLC of New York; Sigma Partners, with offices in Boston and Menlo Park; and Westly Group of Menlo Park. Casella Waste Systems Inc., of Rutland, Vt., has been an equity partner in RecycleBank since 2006.
``We are looking to expand into the United Kingdom and to provide organic waste recycling and more [electronic]-waste services,'' Gonen said.
His company already recycles cell phones through a partnership with CollectiveGood International of Boulder, Colo. That program lets consumers use prepaid mailing labels and rewards them with as many as $50 RecycleBank dollars for the phones.
E-waste makes up 5 percent of all municipal waste worldwide, he said. According to the International Association of Electronic Recyclers, Americans dispose of 4 billion pounds of electronic products annually, including 50 million computers and 130 million cell phones. The U.S. Postal Service has had a similar pilot program since March at 1,500 post offices in 10 cities to provide customers with free prepaid envelopes to recycle inkjet cartridges, BlackBerries, digital cameras, iPods, MP3 players and personal digital assistants.
With recent expansions into Nebraska and Virginia, RecycleBank currently operates in nine states. The others are Pennsylvania, Delaware, New Jersey, New York, Connecticut, Massachusetts and Vermont. The company plans to expand soon into Illinois, Washington, California and Oregon, Gonen added.
``We are looking for areas of high population density in the Northwest, the Northeast, the Southeast and Illinois and California. By 2009, we expect to service 750,000 households and have more than 2 million under contract,'' he said.
That would keep 960 million pounds of recyclables out of landfills annually, based on RecycleBank's estimate that it diverts 128 million pounds of recyclables a year for every 100,000 households.
Municipalities save in landfill tipping fees that RecyleBank said range from $40-$90 per ton, with the savings shared with RecycleBank.
The company also has a pilot program with kiosks at dorms and cafeterias at Columbia University in New York.
Consumers receive $5 in rewards for each 10 pounds of material they recycle, with a maximum reward of $400 annually that can be spent at more than 350 retail partners. The amount of material recycled is measured through a radio-frequency identification chip imbedded in recycling containers in sizes of 35-64 gallons.
The other lure for cities is no upfront costs since RecycleBank bears the cost of imbedding the chips into recycling containers, and retrofitting collection trucks, when necessary, with mechanical arms to lift the containers, he said.
Gonen said that RecycleBank's first organic waste program will be in Hamilton, Ontario, because that city has an industrial composting facility.