Circular economy tech startup Octopus raises US$5m in oversubscribed funding round

OCTOPUS has raised US$5 million in an oversubscribed funding round co-led by venture capital firms Openspace and SOSV, the startup announced in a Thursday (Jul 7) press release. Global and regional investors also participated in the round.

The Indonesian startup’s digital platform aims to transform the waste economy and improve the lives of the country’s informal sector workforce.

“Each waste collector is equipped with a smartphone to get full transparency on supply and pricing and access to digital wallet in the application. This allows the whole collection and drop-off process to be seamless and captured digitally,” Octopus said.

It plans to use the funding to strengthen its ecosystem and expand its services, including the growing collection of electronic waste.

Currently operating 5 sorting facilities and 1,700 checkpoints in 4 Indonesian cities, Octopus handles 380 tonnes of waste each month. Aggressive expansion is in the cards, with the business expecting to amass 100,000 waste collectors by 2024 and set up in more cities in the near future.

Of the 7.8 million tonnes of plastic waste that Indonesia generates annually, 4.9 million tonnes is mismanaged, creating significant interest among users and investors in the circular economy and waste management sector, Octopus said.

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“As of 2020, Indonesia has spent US$0.4 billion on tackling this vital issue and plans to increase the total investment spent on this sector to US$5.1 billion by 2025,” the release said.

The startup was launched in 2021. In the last 6 months, it has grown by over 400 per cent, amassing users at both ends of the value chain, it said, adding that it has attracted around 150,000 monthly active users, more than 60,000 waste collectors and over 20 brands.

Its co-founder and chief executive, Moehammad Ichsan, said: “Octopus democratises the process of managing household’s post consumer products, including electronic waste, in a more approachable manner by providing a seamless way for all people to build the new habit.”

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Shane Chesson, founding partner of Openspace, said: “Octopus is leading the way in using technology to create a step change in the size of the circular economy in Indonesia. Participants at all stages of this supply chain are incentivised to make this happen and most importantly, environmental imperatives need us to get this right.”

General partner at SOSV William Bao Bean said: “Octopus brings a unique solution that benefits every stakeholder: families get rewards for doing the right thing, garbage sorters can increase their income by up to 10 times, recyclers double the amount they can process, and brands can prove how much of their packaging is recycled. It’s a win, win, win, win.”