After selling 20,000 refurbished computers in 5 years, RenewIT wants to make them affordable
There is an old laptop that has been lying around. It isn’t of any use at the moment, as you’ve already purchased the latest model and your data has been transferred and secured. There are limited options for IT scrap, especially, in corporate and large organisations that change their systems once every two or three years. Who would possibly use these systems?
RenewIT was set up in 2010 to answer this question. It buys old computers and laptops from organisations, refurbishes and tests them on quality benchmarks and markets it to schools, NGOs or anybody who cannot afford to buy a computer at the current market rates.
Starting the process
Says Mukund BS, Co-founder, RenewIT, “The mission of RenewIT is to make computers affordable to every Indian.” The idea came to Mukund at a wedding when he met someone from the US who would buy back old computers and laptops from large organisations and strip them down and re-sell the parts to companies who were into after-sales support.
“At the same time, Raghav, my cousin, was looking to upgrade his laptop and the security guard at his apartment was looking to buy an affordable computer,” adds Mukund. The duo put the two incidents together and realised that while there are several large organisations which can afford to buy top-end models every two or three years, there was a wide segment of people which cannot afford to buy a new Rs 20,000 laptop or computer.
“We’ve seen how mobile penetration increased with dropping prices; we hoped that something like this could be achieved with computers. We believe that digital literacy cannot be achieved only with a mobile or a tablet,” adds Mukund.
This is true as most jobs today need some basic computer knowledge. The team currently focusses on buying computers from large corporations, because individual buys is logistics-heavy and not scalable. “The idea is to get laptops, computers and servers at an economical rate, which isn’t so with individuals,” says Mukund.
Creating a new space
Getting the foot through the door was easy for the duo, as the organisations were anyway looking to get rid of their IT scrap. However, corporates have their own cycles of disposal, don’t give small numbers and deal only with bulks. So, the initial days were challenging, right until they could get a critical mass of companies they could source the computers from.
Over the last five years, RenewIT has met with over 500 companies and is in touch with them on a continuous basis. In the initial days, since it was working on scrap, the companies would sell on a ton basis. For example, one ton of scrap would be sold for Rs 30 as it was predominately an unorganised sector.
With time, the team explained to the organisations that one model price would be different from the other.
“So just like in used cars where there are factors like model, year of built and kilometres used, we decided to do the same with computers. We got a team to inspect the computers, and give a report with the computer configuration, issues and other details, and then put a price for the lot,” says Mukund.
While some corporates saw value, others didn’t. For them it was just about getting it out of the system. The team, therefore, works with companies and organisations that see value in this proposition. In the beginning, Mukund would personally go to the organisations with a logistics provider to ensure that the systems are packed and checked thoroughly.
Growth over the years
With time, the team has tied up with logistics providers who understand the business and the parameters for packaging. The buying price of the computer varies dramatically from a working model to a non-working model: from as low as Rs 300 for a unit to Rs 10,000, depending on the specs of the system. The selling price runs from Rs 4000 to Rs 25,000.
Once the team buys the computers, refurbishment of the system is the next stage, for which the they have a standardised process in place.
The team has built servers with drivers and testing software, which brings even semi-skilled and unskilled people up to speed after just a couple of weeks of training and work on the refurbishment process. The team is recruited from ITES and currently consists of technicians, managers and sales people.
RenewIT ended 2014 with revenue of Rs 3 crore and has refurbished and sold close to 20,000 computers till date. The company is growing at approximately 30 to 40 per cent year-on-year. The company is bootstrapped, and broke even in the second year of its operations.
“Even if we are doing social good, we need to be sustainable, and we can’t keep asking for grants and burning through funds,” adds Mukund. He believes there are several processes that needs to be standardised before they seek external funding.
The team has been setting computer labs at government schools and low cost private schools. Sunitha Perumal, who works at one of the schools that RenewIT supplies its computers to, says that the experience they’ve had with the team has been great. The school had wanted computers to help students learn about them. And now, computer education has become an important facet of education for them, she says.
In the last year, RenewIT became India’s first Microsoft-authorised re-furbisher and reseller. It now provides Microsoft licences at discounted prices with the hardware. RenewIT is also in talks with the Uttar Pradesh government to help set up computer labs and computers for schools in the State.