Recellular Announces Expansion Plans

Stockholm, Sweeden-based Investor Growth Capital (IGC) is investing $15 million in a Series A Preferred Stock financing in ReCellular, the Dexter, Mich.-based cell-phone recycling firm. The investment adds a growing clean-tech company to IGC’s portfolioand enables ReCellular to expand operations and accelerate its revenue growth.

XMS Capital Partners, Willmette, Ill., served as exclusive financial advisor to ReCellular in connection with this transaction.

“This investment marks a milestone in ReCellular’s history,” ReCellular CEO Chuck Newman says. “It marks our transition from a successful start-up in the emerging field of cell-phone recycling into the undisputed global leader in electronics sustainability.”

ReCellular’s revenues have increased an average of 25 percent for the past eight years. The company bills itself as the leading collector, recycler and refurbisher of cell phones in the world. In 2008, the company is on track to process more than 6 million phones.   

“Our goal was to develop a profitable company that was socially and environmentally responsible,” Newman says. “With IGC’s support and investment, we will dramatically expand the company and set the standard for success in electronics-sustainability and clean-tech operations.”

For IGC, the investment in ReCellular is part of the investment firm’s “clean-tech” investing practice. The clean-tech sector is one of the fastest-growing sectors of the market; according to the National Venture Capital Association, investment in clean-tech operations has increased tenfold during the past five years, from $235 million in 2003 to $2.6 billion in 2008.

“We see tremendous growth potential in ReCellular,” Albert Kim, vice president of IGC, says. “They have revolutionized the electronics-sustainability industry by providing a convenient solution for consumers to recycle their used handsets, while at the same time extracting enough value from these phones to build a successful business.”

IGC is the wholly owned venture capital arm of Investor AB, the largest listed industrial holding company in the Nordic region. IGC invests in high-quality, growth-oriented companies in North America, Europe and Asia.

In connection with the investment, Noah Walley and Albert Kim will join ReCellular’s board of directors.

“We chose to partner with IGC because of their deep knowledge of the sector, their experience with growth-stage companies and the value they can bring through rich networks in the U.S., Europe, and Asia,” Newman says.

Recellular plans to expand its operations, opening new office facilities, consolidating processing facilities and significantly increasing the number of Michigan employees. The company also seeks to rapidly increase phone collections, focusing on direct-to-consumer and trade-in partnerships, building consumer awareness of the benefits of cell phone recycling. Recellular will evaluate strategic acquisitions of other electronics recycling businesses that could complement its expertise and operations

Recellular currently has offices in the United States, Hong Kong and Brazil.