The first garbage sorting startups have gone bankrupt

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Since the recent promulgation and implementation of the new waste management regulations in Shanghai, waste classification has become a hot topic.
According to Sanyan’s previous survey, the number of registered companies related to garbage classification is increasing sharply, and related small procedures and public numbers are also emerging.
According to the Tian Eye Survey data, only from June 17 to July 17 this year, 8346 new enterprises covering “garbage, garbage classification, garbage recycling and garbage disposal” were established in China.
But on the other hand, looking back at those companies that started early on the Internet + recycling track, they are now in a mess, surrounded by bankruptcy reorganization, closures, staff salaries and so on.
One
Little Yellow Dog: More than 1 billion yuan was raised and now bankruptcy reorganization
Little Yellow Dog has been hailed as a sample of the new garbage sorting and recycling industry which combines capital and technology, but its current situation is worrying.
According to Tian Eye Check, Xiaohuangguo Environmental Protection Technology Co., Ltd. was established in August 2017. It is a wholly-owned subsidiary of Derivative Science and Technology Group Co., Ltd. with registered capital of 100 million yuan. The company is mainly engaged in intelligent garbage classification and recycling business, and the actual control is Tangjun.
In June 2018, Little Yellow Dog won a round A financing of 1.05 billion yuan, including Zhongzhi Group. In October 2018, it also received 150 million yuan strategic financing from the listed companies of the Shenzhen Stock Exchange, with a valuation of 15 billion yuan.
In addition, Hong Te Technology, a listed company of Shenzhen Stock Exchange, which signed a strategic cooperation agreement of 5 billion yuan with Little Yellow Dog in July 2018, said in its reply to the Shenzhen Stock Exchange that as of July 17, 2018, Little Yellow Dog products had covered Beijing, Shanghai, Guangzhou, Shenzhen, Chongqing, Dongguan and Yiwu, and had entered 156 residential communities. The team of Yellow Dog Company is negotiating and promoting with relevant organizations to sign up for 10,000 communities in batches.
At the same time, Hunt Technologies replies that it expects to purchase about 100,000 sets of intelligent recycling equipment from the company and foresight by 2020. According to the preliminary conservative forecast based on the sample data, if each group of intelligent waste sorting and recycling machines generates 100 yuan of business income per day, it will bring 2.265 billion yuan of revenue by 2020.
With 10,000 communities valued at 15 billion and estimated annual revenue of 2.265 billion, this figure shows the industry’s expectations.
However, such a “sample” enterprise has encountered the difficulties of stopping operation, staff salary, bankruptcy and reorganization this year.
According to media reports, since February this year, many machines deployed by Yellow Dog in Beijing, Shanghai, Qingdao, Wuxi and other cities have stopped using. Some of the recycling equipment is labeled “system maintenance, temporary suspension of recycling machine service”, and others are labeled “due to the small yellow dog’s own business problems, please withdraw the existing amount as soon as possible to avoid unnecessary losses”.
In March, Dongguan police disclosed that the group lending network was investigated for allegedly illegally absorbing public deposits. Tang Jun, who is also in charge of the group lending network, has voluntarily surrendered the case.
In mid-April, Baidu Yellow Dog Post Bar appeared a large number of employees’salary information. Shortly thereafter, according to the report of Yun-hunting. com, the Yellow Dog was affected by the group lending network incident, the funds were frozen, many places were shut down, and more than 4,000 employees were forced to leave their jobs.
According to reports, Yellow Dog explained in an internal email that “due to the impact of the”group cargo network”incident, the company’s accounts were frozen by the government, the company lacked liquidity, could not operate normally, and could not pay wages, social security and housing accumulation fund on time. The future direction of business development is still unclear.” For employees’salary payment arrangements, the date of payment is uncertain.
In late April, some Weibo users reported that the yellow dog near their home had stopped operating.
In early May, Little Yellow Dog posted a microblog saying that it had resumed operations at the end of April and that some cities were still in the process of recovery.
However, three months later, the recovery of the yellow dog in Beijing seems not optimistic.
On August 5, according to Beijing Time, many residents reported recently that yellow dogs in several districts in Beijing were still unusable or unmanned. At the same time, there are also netizens on the sticker bar to reflect similar situation.
This is probably because the Yellow Dog is now in a state of bankruptcy reorganization.
On June 6, 2019, Derivative Science and Technology issued the Notice on Abnormal Fluctuation of Stock Exchange, which mentioned that the money owed by “Little Yellow Dog” to suppliers can not be paid normally for the time being, and that “Little Yellow Dog” currently pays a large amount of external debts. If it can not resume normal operation and pay all the money, it may start bankruptcy. Reorganization procedures.
On June 26, Ningbo Evening News reported that the head of Xiaohuangdao Brand Department said: “The company has gone through the process of bankruptcy restructuring, and now it is progressing normally. This decision does not affect the normal progress of the business side, and the remaining problems are gradually solved.
For the continued operation of the equipment, the person in charge said that the company needs to complete bankruptcy reorganization first, and then plan according to the specific operation situation.
According to the Beijing News, on August 1, insiders of the Yellow Dog said that the company’s bankruptcy restructuring had been accepted by the court. At present, 70% of the cabinets in Beijing have been restored to operation, and 30% will be restored in the next few months.
Haidian District
Fengtai and Daxing
Tongzhou and Changping
Today, Sanyan Finance and Economics Login Xiaohuangdao App found that in many areas of Beijing, the Xiaohuangdao garbage collection cabinet is still partly temporarily full or maintained.
A Beijing resident told Sanyan Finance and Economics that the yellow dog garbage recycling cabinet in his community has been powered off since it was discovered in November last year, and has never been connected, so it can not be used.
Sanyan Finance and Economics dialed Xiaohuangguo Customer Service Hotline, always prompting busy. Online customer service said that some parts of the recycling cabinet were not cleared because of the current shortage of manpower, and the time for complete recovery in Beijing could not give a definite answer.
In addition, Sanyan Finance and Economics noticed that Xiaohuangguo’s microblog, which had been updated three or two days earlier, also stopped updating on June 18.
Two
Langton Technology: Hangzhou’s First Intelligent Recycling Company
Has won 2 million yuan of Venture guidance fund
Intelligent recycling bins eventually become garbage

As early as March 2010, Hangzhou introduced the system of classified treatment of municipal solid waste (MSW) sources. In some pilot districts, classified bins were placed to reduce the amount of MSW. However, the blue trash cans used for recyclables in many residential areas have never played their due role.
The most valuable cardboard, waste household appliances, etc. will be sold to the waste recycling station by residents. Other recyclables will be mixed with broken kitchen garbage bags, sewage and messy things. Even if several plastic bottles can be picked up, they will be stained with spoiled napkins and vegetable leaves. In this case, the recyclables in garbage will also be abandoned and can only be sent to incineration or landfill with other garbage.
Wu Bingxin, founder of Langdun Technologies, saw business opportunities in wasted recyclable garbage and registered Langdun Technologies in April 2012. The solution she came up with was to initiate incentives to encourage residents to classify all recyclables into recycling bins with the encouragement of points and awards.
As the first company to provide intelligent recycling equipment, Langdun Science and Technology has received 2 million yuan from the municipal government to start a business guidance fund. Langdun Science and Technology is also supported in the urban area, indicating that the number of equipment in the streets and residential areas can be increased to 100. Therefore, Langdun Science and Technology began to lay waste classification intelligent recycling equipment vigorously.
However, the results of classified recycling are far from Wu Bingxin’s expectations.
According to the statistics of Longden Science and Technology in 2015, after more than a year of recycling, the top three recyclers in the company are 18.9 tons of glass bottles, 6.74 tons of plastic bottles and more than 900 kilograms of batteries, which are not worth money. Although cardboard, old household appliances and so on also have, but the quantity is not much, can not make the climate. Together, these can not cover the operating costs of Langdun Technology.
At the end of 2016, more than 70 recycling equipments of Langdun Science and Technology were cut off one after another. The intelligent waste sorting and recycling bins placed in the district for more than three years were loaded onto trucks and transported to the garbage collection station, which also became garbage.
Langdun Technologies, which is no longer operating, was finally suspended on June 26 this year.
Three
The first batch of pits trampled by garbage sorting and recycling companies:
Small amount of recycled materials with low value can be used for reference without previous experience
With the hard exploration and even collapse of the first batch of garbage sorting companies, some “big pits” of entrepreneurship in the field of garbage sorting have emerged.
From the lessons of the rise and fall of Langdun Science and Technology, we can see that the small amount of recycled goods and low value are the main reasons that make it unable to cover operating costs, which is actually a problem of location selection.
Only when the classified recycling bins are set in a large number of residential districts, the recycling point is not far from the residential home, and the recycling price is reasonable, can the problem of small amount of recycled materials be solved.
This requires solid research in the early stage and good user education in the later stage. It also needs a certain amount of time, and we must not lay recycling boxes at will.
From the point of view of the current operation of the Yellow Dog, although its recycling machine is huge, classified in detail, and has separate storage space for metals, plastics and glass, the emergence of paper, textiles and plastics is the most serious in the period of its suspension of operation, while the remaining categories are in such a long period of time. It has not been filled up in the interval.
This just shows that there are still some deviations in the estimation of household garbage thrown by the Yellow dog’s garbage bins, and there is still room for improvement in the spatial arrangement of different types of garbage in the bins. More importantly, the shortage of manpower reflects that garbage sorting operation needs higher manpower cost, in order to maintain the good operation of “empty-full-empty” garbage bin.
According to Zinc Finance and Economics Report, Fang Hao, founder of idle bean recycling, did market research before entering the market of waste sorting and recycling.
He found that 2C had high operating costs, low unit price and difficult overall profitability, while 2B had high frequencies and high passenger orders, and the predictability of profitability was strong, so he eventually abandoned the C-terminal layout.
At the same time, in the category of waste recycling, he also chose to cut in from a single category – waste paper: waste paper recycling demand is large, stable, recycling prices are relatively high. He intends to expand the category after running through the waste paper category model.
However, the largest garbage sorting platform that has just been on the line for a year and Alipay currently works together is the founder of the largest garbage sorting platform. The cowshed revealed that he and his team had gone through a whole year’s investigation before the “Yi Dai throwing” officially started operation.
“We went to the garbage dump, went to the experts for advice, and picked up the garbage can for two weeks. We found that half of the things in the garbage can be recycled.” The cowshed said.
The cowshed said that during that time, he walked through more than 100 streets, went to the community, recycling station to find out about the situation, and chatted with aunt cleaning, property security, even the grandfather riding a tricycle at the entrance of the community and other people who took the side with garbage.
He also said that because the industry has no reference, they initially can only “copy” other similar industries, waste household appliances recycling, mobile phone recycling they copy, to study how they can contact recycling enterprises.
Four
Conceptual Reheating Capital Enthusiasm
Most are still losing money.
With the re-promotion of the concept of garbage classification, the field has also welcomed the enthusiasm of capital.
According to Sanyan Finance and Economics statistics, only in the late sixties, there were 70 new companies registered for waste classification, with registered capital ranging from hundreds of thousands to tens of millions. In the last week of June alone, 53 new companies were registered.
But whether or not these companies can survive and how long they can survive has to be questioned.
Li Guang, founder of “I Love Recycling”, who has been recycling garbage for more than two years, said he was still exploring his way.
“No one knows what it looks like behind it. But the market is big enough. Conservatively, when we put in two or three hundred boxes, the business will be completely profitable. He said so.
The founder of “Yi Dai Tuan” cowshed revealed: “We have lost 45 million.”
“If orders exceed billions, they will certainly make money. But there is still a long way to go from this order volume.

In June 2019, the company’s sales revenue of dry garbage was about 300,000 yuan, and the revenue of government procurement was about 400,000 yuan. However, the company’s monthly manpower cost and operation cost were about 800,000 yuan, and the residents’environmental protection fund expenditure was about 200,000 yuan. Right, in a state of loss.
“Now the scale of users is about 100,000 households. With the increase of users and the decrease of marginal operating costs, it is expected to achieve a profit-loss balance.” He said.
It can be said that behind today’s bustling waste classification, most projects are still at a loss stage, and sustainability still needs to be explored.
In the future, Sanyan Finance and Economics will continue to pay attention to the fate of start-ups in the field of garbage classification.