Trickle-down gadgetnomics: India’s consumers get into swing of recycling gadgets for cash

India’s smartphone boom is now in full swing as people upgrade from “feature phones.” That’s creating an increasingly sizable market in people selling off their basic phones and their first ever smartphones. Not many people are doing this via Craigslist.

Instead, they’re turning to sites like Karma Recycling, where people can sell their used gadgets. Today the startup announced it raised series A funding from Infuse Ventures and the Low Carbon Enterprise Fund to grow the business.

Karma offers pickup services for over 3,000 models of smartphones, tablets, and laptops and gives cash for them instantly. After the purchase, devices are data wiped, repaired, and refurbished in-house. The startup claims that it goes through a 70-step process on check before each gadget is sold on, with month-long warranty, through Karma’s network of dealers which mainly involves brick-and-mortar retailers.

In addition to pickup directly from customers’ doorsteps via the online portal, the company has tied up with large multi-store retailers such as Sangeetha Mobiles, Bharti Retail, and Apple authorized stores to enable in-store exchange, buy back, and reverse logistics.

Reuse or reduce

Karma Recycling founders Aamir Jariwala and Akshat Ghiya

“The development of technologies and services for buyback and exchange related services solves a valuable problem for consumers, retailers and manufactures of consumer electronics”, said Aamir Jariwala, Karma Recycling’s co-founder and CEO.

“The aim is to extend the life of a mobile device as much as possible, and when it cannot be extended any further, to recycle it responsibly,” adds co-founder Akshat Ghiya. “The devices which are acquired from metros to smaller towns and villages empower many who could not afford brand new devices and allows them to enter the mobile economy.”

Ghiya, an economics grad, is also a founder Glazetech Industries, which manufacturers and distributes recyclable construction materials like zinc, copper composite panels, and aluminium roofing sheets. He founded Karma Recycling along with his classmate Aamir Jariwala, an investment banker.

The two-year-old startup claims to have recycled over 16,000 smartphones, tablets, and laptops. Its angel investor is Safexpress, a logistics firm that operates a pan-India network of delivery services; it also acts as a logistics partner for Karma. The company’s consumer services are active in 24 Indian cities and its proprietary product for retailers, XchangeHub, is active at 125 retailer stores.

The series A funding amount is not disclosed, but with prior seed funding the startup says it amounts to US$500,000. The fresh funds will be used for developing the exchange technology and to expand its consumer and retailer facing operations across the country.

Big market, huge competition