A VC in Vacationland

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Finally…a real business model for the recycling business.  TerraCycle has created a company that can actually provide the correct financial incentives across the waste stream to allow all participants to make money.  In a nutshell, Terracycle pays for recyclable materials from companies, charities and schools, turns them into "cool" products and sells them for a profit. Only five years old, the company is transforming ideas about how to best reuse packaging materials.  And they have convinced many major consumer products companies–Kraft, Mars, PepsiCo, General Mills and Kimberly Clark to participate in their programs.

By the end of 2010, TerraCycle will process  millions of recycled consumer packages from across the US, from brands such as Capri Sun to M&M's. TerraCycle's five warehouses process consumer packages sent in from over 8 million people, who are paid on average 2 cents per package. The materials, along with unused rolls of packaging materials, are processed into pencil cases, backpacks, bag (see picture) and storage bins.  These are sold at Target and Home Depot, among other leading chains. Their product licensing model has been the key to success, atttracting companies like Disny who want to be more "green" with their consumers.

TerraCycle is profitable and expanding globally. And breaking all the rules of running a start up, according to an interesting article in the Financial Times. Note-viewing the article requires free registration on the FT site.

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