Mr Green Africa
Location
Kenya
Sector
Waste management
Type of Investment
Risk Capital
Project Stage
Length of Investment
2019+
Website
Investment Overview
Mr. Green Africa innovatively integrates its supply chain by purchasing plastic waste from wastepickers, recycling it into pellets, and supplying these to companies like Unilever for use in plastic product packaging, thereby reducing the need for virgin plastic resin.
The Development Challenge
Emerging market cities grapple with significant waste management challenges, producing thousands of tonnes of waste daily, where approximately half is collected, and in the instance of Nairobi only 10% recycled. Waste pickers, crucial yet marginalised, operate independently, facing exploitation and low pay from traders. The absence of guaranteed demand for their collected waste often leaves them without income, highlighting their vulnerability in the informal sector.
The Innovation
Mr Green Africa recycles and sells ethically sourced materials with a traceable social and environmental impact. It has 6,000 registered waste collectors, who are paid a premium over other informal market rates thanks to Mr Green Africa’s operational efficiencies allowing the business to pass on these benefits to waste collectors. Mr Green Africa collects approximately 3,000-4,000 metric tonnes per year of fairly sourced plastic to process and sell to local markets. The business formalises the plastics supply chain, creating dignified jobs, whilst addressing the problem of plastic pollution for growing cities.
Our Investment
GIF co-led Mr Green Africa’s Series A round in 2019 alongside DOB Equity, providing $1.0m of equity and debt. GIF has since provided follow-on funding totalling $1.1m, enabling the company to raise a successful Series B round in 2021 and significantly scale its operational capacity and impact on waste collectors.
Theory of change
Mr. Green Africa significantly impacts marginalised communities, offering waste collectors premium prices above local competitors by streamlining the value chain and enhancing recycled material value through high-quality processing. With GIF's investment, it aims to improve operating margins and enhance engagement and employment benefits for waste collectors. Mr. Green Africa's innovative model positions it as an emerging leader in inclusive growth, inspiring recycling and FMCG companies to adopt ethical sourcing practices from marginalised waste pickers, driving broader industry changes towards responsible and socially inclusive business practices.
Why we invested
High potential impact on an extremely marginalised and impoverished group of people with little or no other targeted innovations for waste collectors.
Build a demonstration effect to help prove out the potential of an integrated model that sources directly from waste collectors, which can be replicated in other geographies.
Strong fit with sustainable urban growth, given plastic waste is a growing problem in urban centres and the existing state of waste collection in sub-Saharan Africa is highly inefficient, with most recyclable material ending up in landfills.
Mr Green Africa in numbers
Registered waste collectors
Women waste collectors
Tonnes of responsibly processed plastic
Mr Green Africa Impact Brief
Mr Green Africa (MGA) is a tech-enabled plastics recycling company disrupting the informal and exploitative plastic recycling sector in Kenya. It offers an in-house end-to-end process for plastic recycling by purchasing directly from sourcing agents or waste pickers, who are often some of the most marginalised people in society. MGA owns and operates a series of trading hubs across Nairobi and Kenya’s coastal region where it transacts with its sourcing agents directly to purchase collected plastic for onward transfer to MGA’s recycling facility. Here, the collected plastics are processed and sold as post-consumer recycled plastic pellets to plastics manufacturers for use in plastic packaging for large, fast-moving consumer goods (FMCG) products, such as those sold by Unilever.
Use of GIF Funds
GIF’s investment is being used to fund additional recycling machinery, IT upgrades, team expansion, and working capital. GIF’s investment is made through the Advance Fund.
Objectives
To grow the volume of plastics processed by opening further trading points, onboarding additional sourcing agents, investing in IT upgrades, and investing in new machinery to increase the quality, quantity, and types of plastics that can be recycled, whilst improving its gross margins . Additionally, to successfully scale to reach 50 trading points in Kenya by the end of 2023, to collect 5,000 metric tonnes of plastic per year, to engage a previously informal supplier network of more than 3,000 full-time sourcing agents, and to be on the path to breaking even and then operating profitably by 2025.
Impact: MGA formalises the waste picker sector, using technology enabled information flow and transactions. MGA provides reliable pricing and significant income improvement for an extremely marginalised and impoverished population, and also has a positive impact on the environment in the process.
Innovation: The MGA model becomes globally recognised as the model for building integrated recycling infrastructure in developing countries while formalising the millions previously living as informal waste pickers and helping to lift them out of poverty.
Scale: MGA collects 20,000 metric tonnes per year, engages a previously informal supplier network of more than 5,000 full-time sourcing agents, and reaches both operating and cash flow breakeven.
Commercial: Increases revenues and margins to the point where MGA is operating profitably and can either buy back shares, pay dividends, consider acquisition offers, or scale to new markets beyond their current 3-year projections.
Additionality: GIF is providing capital at a relatively high-risk and decisive point for the business which not only leverages additional capital, but acts as a values-aligned investor who supports MGA to stay mission-aligned throughout their growth and also advocates for a more ethical supply chain in service of deeply impacting marginalised waste pickers.
Impact to Date
In 2022, MGA recycled 2,300 metric tonnes of plastic waste, and saved an estimated 4.8 million kg of CO2 emissions. Over 2,000 waste pickers were empowered through the MGA model in 2022.