Nitin Gupta of Attero on What it Takes to Build a Global Clean-tech Business from India
Nitin Gupta, founder of Attero, started off uncharacteristically, like many businesses founded on a flash of an idea and a strong belief supporting it. With the desire to make a change in the clean-tech space, he followed his heart and contacted Dr. Kumar Shiralagi, Managing Director at IndoUS Venture Partners, in 2007. He says, "At that point of time, there was no business model as such and the company was not registered. It was just a PowerPoint presentation used for pitching the idea. We pitched to Kumar with that presentation and he seemed to be interested in the idea. Post that conversation he asked us to get on a conference call to understand our thought process: what are the challenges, what are the pain points and how should we look to find solutions. After this conversation, Kumar deliberated and did some of his own diligence for a couple of months, after which we were in front of the IUVP committee. It was a proper interaction." There has been no looking back since then and in five years, Attero has emerged as the top e-waste recycling company in India, thanks to Kumar betting on the idea and funding it. "He was very down to earth and it was fun working with him," Nitin says of Kumar. And to show Attero’s innovative capabilities, it is enough to say that they have seven patents against their name.
Annually across the world, 15,000 tons of e-waste is recycled and a whopping 750,000 computers are ripped off and their valuables are extracted before disposing. Attero is spread across India, and Nitin gives pointers to the Attero way: "We are picking e-waste from more than 150 cities across 5 states in the country. Every single equipment that is recycled has a barcode and it can be tracked. We have over 450 clients, which include companies like Samsung, Wipro and HCL. We are recycling around 6,000 tonnes of electronic waste on an annual basis, which in turn translates to 3 lakh PCs." With environmental concerns growing stronger by the day, recycling practices have to comply with pollution norms. Nitin emphasizes, "Carbon credits don’t play any role in the revenue model and we do not expect them to contribute to revenue in the future either. It’s just a stamp that our products are sustainable from an environmental perspective; and our clients can also claim each time they send us electronic goods for recycling that it’s actually good for the environment." Thus, Attero has emerged as an environmentally conscious firm, and aims to become the world’s largest e-waste recycling company in the next five years.
The journey began with a personal pain-point for Attero. Rohan Gupta, another co-founder of Attero, had a dead laptop in 2006 and purchased a new one. When he was wondering what to do with the old laptop, the curiosity got stronger to understand how laptops are recycled and how to dispose of the old laptop. This led to research, after which a business idea was born. Nitin and Rohan were intrigued by the technology used to responsibly dispose the contents of computers and then began to lay the plans for the operations. With this framework of an idea, they approached Kumar and IUVP eventually invested in the idea. That’s a bravado act as idea funding was largely unknown in India back then and to a large extent even now. The myth that Indian investors in the technology sector are risk-averse is blown out here. For IUVP, it was risk worth betting on.
While the concept was exciting, there existed real-world execution challenges of obtaining licences that are required to set up manufacturing operations in India. Furthermore, the founders were fully aware of the immature ecosystem and its inability to support a venture of this nature. While it’s tough to get through the bureaucratic and statutory norms, Nitin feels if one is hard working and smart, one can do it. Nitin and Rohan worked it out on an IP model to keep the operations cost-efficient and focus on developing a distributor network for e-waste inside and outside the country. So the comany needed nearly $5 million initially. Nitin explains, "We spent $2 million for land/building and approximately $2.5 million for machinery. That’s all we spent at our initial stage." Attero is now in the process of setting up plants outside India and extending its services to customers outside India.
Attero, a 150-strong team now, has an average employee age of 27 years. Giving a sneak peek into the operations, Nitin takes the example of the mobile phone: "Just to give you an idea, the cell phone on which you’re talking right now, comes apart as 99.99% pure individual material after getting processed at our plant. The elements found can be reused. All of this is sold in India at the Multi Commodity Exchange (MCX)." The items to be recycled are categorized into first bucket and second bucket. In the first bucket, the recycled value is more than the logistics and this includes laptop, mobile phones and higher range of electronic products. The second bucket products such as television and refrigerator are recycled only if someone pays for it. Under Attero’s ambit, all electronic items are recycled.
Building competency was enabled by a strong focus on research and hiring the right talent. Nitin tells us how the team was built. "We hired a few smart guys with a chemical and metallurgical background. I was involved in the research prior to starting up. We spent the first year on hard core chemical, metallurgical research. Subsequent to that we have evolved our practices." The company is engaged in researching on green solutions to metal extraction from secondary sources, such as electronic waste. The technology teams have done extensive trials and experiments to arrive at the right methods of extraction while using environmentally friendly chemicals.
Nitn's experience at the Stern School has come in handy, as evident in his words: "It makes you more grounded and rounded I would say. The second most important thing is networking. So whatever venture you’re into, you should always network."
Attero has always believed in networking and since long focused on the B2B segment. Nitin, speaking on the marketing aspect, says, "We used to approach companies and tell them why electronic waste is an issue, why should they work with us and try getting the contracts. We did do some marketing, which includes contact programs and conferences." This plain-handed approach also is practiced in hiring and we have a dedicated core team.."
In the highly competitive e-waste recycling space in India, Attero wins by treating customers as their partners and by the technological edge of having the capability to extract metals from the e-waste.
Over the last five years that Attero has been in business, the awareness about clean-tech has increased. The regulatory framework has gotten stronger with the Government of India proposing legislation for e-waste disposal this year. India is the only country in the world to bring e-waste recycling under a regulatory framework and Nitin wants the norms to be enforced properly instead of making new ones. Regarding the importance of e-waste recycling, Nitin says, "In simple terms, it’s like if you buy Apple’s laptop, then the responsibility of Apple doesn’t end with the warranty but till this particular laptop is safely recycled."
On challenges that Attero has faced since its beginnings, Nitin gives an overarching view: "Challenges were faced at multiple levels. Issues like buying land for setting up the plant, getting clearances from the electricity department and pollution control department came as big challenges. Getting all the required licenses also took over a year. Even today these things take time. Especially when you do things in a clean manner because they expect you to pay money, else they will delay things unnecessarily. This is the kind of frustration which we faced initially." Attero feels the government’s legislation has had a positive impact, but it was delayed by three years. Nitin explains, "It’s important because when the Government of India enacts a regulation that hazardous electronic waste should be recycled, it plays an important role." Marketing was also a challenge as awareness about recycling was lacking, as evident by Nitin saying, "Most of the companies following global policies for electronic waste were based on state-run policies and considered India as a dumping ground."
Talking of opportunities in clean-tech, Nitin says clean power and clean fuel are huge opportunities as India is a power-hungry nation and any "non-reliance on petroleum" perspective would be a beneficial area of focus for a start-up. With existing constraints, Nitin feels technology-based solutions to these problems will make the maximum impact.
The global trends on e-waste revolve around two issues: the metal waste not contaminating the environment and data security. Rare metals like silicon and germanium, precious metals like platinum, palladium and other metals like copper are found in e-waste and extracting them from e-waste is cheaper. Nitin believes that as the demand for electronic goods is increasing, the e-waste can be looked at as an alternative source for these metals instead of looking at mining them from natural sources.
Contributing to society by starting up and building something motivates Nitin to carry on in this challenging business. "Passion drives a start-up entrepreneur", says Nitin, adding, "starting a company takes one through the roller coaster of emotions and you need to be strong that you enjoy and sustain the ride."Clean-tech entrepreneurs should focus on "how can they make life simpler, faster, better and cheaper, and how can technology can eliminate the barriers," signs off Nitin.
Note: The post was originally on Kalaari Capital's website. For more about Attero, click here.
