In May 2021, GSMA launched the GSMA Innovation Fund for Digital Urban Services with support from the UK Foreign, Commonwealth & Development Office (FCDO). The fund was open to start-ups and early-stage companies providing essential urban utility services who leverage digital innovations to make these services more accessible, reliable, sustainable and affordable. Successful organisations were awarded between £100,000 and £250,000 in grant funding and were provided with technical assistance. Pitches were received from 335 organisations in 43 countries across Africa, South Asia and Southeast Asia, and from these, a cohort of nine organisations were selected. This blog series summarises the key learnings from the grant period.

Regenize provide a free residential recycling collection service that incentivises residents for recycling and is operated by integrated informal waste collectors operating from decentralised recycling hubs (DRHs)​. They operate a freemium recycling collection service that incentivises residents with Remali, a virtual currency that can be redeemed for various rewards, such as airtime, data and grocery vouchers online (i.e., the Remali app) or offline (i.e., a local Remali convenience store). 

The free model ensures that Regenize reaches the majority of citizens (primarily the low/low-middle income groups), and that their DRHs recover materials locally ensures segregation and initial processing occurs close to source. Regenize support waste pickers with PPE, fossil-fuel-free recycling tricycles, equipment, mobile devices, access to clean recyclables and a DRH. Regenize currently collect household dry waste (paper, glass, plastic and metal) and organics. 

South Africa has high recycling rates for some waste streams; for example 63% of PET plastic bottles produced are recycled. However, there are low segregation rates for household waste, with around only 10% of urban households separating their waste at source. The country’s recycling sector depends on the 90,000 waste pickers that collect material from households and businesses. These waste pickers make huge contributions to the sector; as of 2016 it was estimated they save the government up to $50 million a year through landfill space and collect up to 90% of all paper waste. Despite this, they work in hazardous conditions, many travelling between five to 20 miles a day by foot searching through bins or landfills as they do not have access to clean, separated recyclables.  

Purpose of the grant and key outcomes

GSMA supported Regenize to scale their solution through opening four new DRHs in low/low-middle income communities in South Africa used for sorting and storing recyclables as collected.​ Additionally, the grant supported the development and launch of Remali native app on Playstore, and the recycling service middleware that supports the front-end app.

The key grant outcomes cover Regenize’s scaling, partnerships, and user experience:   

• As of the grant closure, the new DRHs serve close to 7,000 customers/households. These centres processed 556 tonnes of waste per year, and averted 1,184 tonnes of CO₂ from entering the atmosphere.  
• Regenize are in the process of finalising a partnership with MTN South Africa to launch the app on the MTN Ayoba platform. MTN subscribers will be able to use the app without incurring any data charges, ultimately making it a cost-effective option for them. 
• Regenize signed a partnership with PepsiCo to launch five DRHs serving 5,000 households, and with AB InBev to improve tonnage processes and drive user growth at existing DRHs.  
• 85% of users reported improved access to waste management service, and 50% of users used mobile money for the first time. 

Key learnings from the grant  

• Large price fluctuations on the secondary materials market impacted DRH margins. There are only a few companies in South Africa that buy, and process sorted waste. Over the grant period, the price paid for some waste streams dropped by as much as 75%. As such, Regenize are exploring vertically integrating to process plastic waste to washed flakes, which could increase the value they recover from the waste by x3. Regenize are also exploring adding new revenue streams to ensure sustainability, which included advertising ad space using its existing infrastructure.  

• Instigating behaviour change required a significant effort. In combination with the financial incentive (Remali), Regenize found that to successfully launch in an area and encourage waste segregation, door-to-door engagement was both needed, and was the most effective method. The drawback is that this is costly and time-consuming.  

• Price fluctuations impacted waste pickers. Regenize operated a commission-based model with their waste pickers. As such, price fluctuations on the secondary market also impacted the waste pickers. Where material prices dropped substantially, some waste pickers would seek alternative employment, posing challenges for the continuity of operations. Regenize have recently moved away from the commission model through joining a government scheme where waste collectors get paid a subsidised wage by the government and become employees of Regenize.  
• The structure of the South African EPR legislation means Regenize has struggled to benefit from producer responsibility organisation (PRO) funding. Under the South African EPR rules, importers of plastic pay a per tonne fee, which is then channelled to PROs to spend on supporting recycling. However, the operations of these PROs vary significantly, and each have different priorities and spend in different ways. While Regenize have received some in-kind support from PROs in the form or equipment, they have yet to benefit significantly from PRO funding.  

Looking forward

Following their experimentation, Regenize are confident in their model and are preparing to embark on a growth phase. With strategic partnerships firmly in place and a proven formula for success, their immediate objective is the establishment of the next 100 DRHs. To achieve this milestone, securing funding is imperative and Regenize are currently being advised by the Climate Finance Accelerator on scaling. While actively pursuing funding opportunities, they are also exploring alternative avenues to scale their model. Notably, they have identified smaller municipalities eager to leverage our expertise in the collection and management of recyclables. This presents a compelling opportunity to broaden their impact and extend the reach of our sustainable practices.  

A new GSMA report on circular economy solutions

The GSMA recently published ‘Making Circularity Work: How digital innovation enables circular economy approaches in waste management’. This report takes stock of how and where digital innovation supports circular economy models in waste management. It presents insights from Regenize’s experience alongside others from the recently completed GSMA Innovation Fund for Digital Urban Services, as well as insights from other start-ups from across the ecosystem. While global recycling and reuse rates remain grimly low, and waste volume is outstripping population growth by a factor of two, the report highlights some key positive trends supporting circularity. There is growing momentum behind national and global policy change governing waste. In many cases, these changes are market-making for those working towards circular economy approaches. Demand for secondary materials in manufacturing is also rising, particularly those from e-waste in response to the limited global supply of critical inputs. That the waste sector is such a significant source of emissions presents the opportunity for mitigation, and for access to climate finance. Lastly, start-ups working in the waste sector are increasingly being viewed favourably by investors, with series raises in the tens of millions being increasingly common.