RoadRunner Recycling Inc. has closed on a $70 million Series D funding round, which comes following years of continued expansion for the Pittsburgh-based company.
This latest fundraising round also comes a little more than a year after the company closed on its $38.9 million Series C.
New York-based growth equity firm General Atlantic LLC led the round as part of its BeyondNetZero fund, a $4 billion initiative aimed at equity investments in companies addressing climate change. Other internal investors also participated in the Series D round, including Avery Dennison Corp. (NYSE: AVY), FJ Labs, Greycroft, Headline and Valo Ventures.
"We founded BeyondNetZero to support innovative growth companies that are producing practical, tech-enabled climate solutions — like RoadRunner — and help them scale so they can accelerate the net-zero transition," Michael Bevan, managing director on the BeyondNetZero team at General Atlantic, said in a statement. "We are thrilled to partner with RoadRunner and its management team as they strive to make sustainable waste management more affordable and achievable for businesses across the globe."
Founded in 2014 by CEO Graham Rihn, the company specializes in providing businesses with technology-driven and custom-tailored solutions for commercial waste recycling. RoadRunner handles cardboard, paper and mixed recycling as well as food composting needs for businesses. It also manages recyclable waste pickup for its customers through a network of fleet-based, licensed vehicle operators.
Now, with its latest and largest funding amount secured to date, it plans to expand its services throughout the country beyond the 18 cities in which it already operates, as it also prepares to someday make its public debut on a stock exchange.
"We think this is a pre-IPO round. We think that this Series D will potentially take us to our IPO in the next few years, depending on how we do and what the markets look like," Rihn said. "We're definitely starting to elevate the business to a phase of being a significant national player."
Rihn said the company started 2021 with about 200 workers. Now it's at over 400 employees, and with the new infusion of capital, Rihn expects to have just under 800 workers on company payroll by year's end.
The company's plans include expanding into an additional 20 markets over the course of the next year and a half, more than doubling its footprint, Rihn said.
The company will also look to expand its technology and product teams, the former by as much as three-to-four times its current size, to ensure it is building industry-defining technology at a pace as fast as the Road Runner himself.
About a year and a half ago, the company started an enterprise department aimed at targeting the world's largest companies and their needs for a comprehensive recycling program in an era where carbon reduction and sustainability efforts continue to grow in popularity. Continuing to expand this department with these new funds is vital going forward, Rihn said.
"It's the first time in my career in the waste industry where sustainability by way of recycling is now required versus what was previously preferred," Rihn said. "That creates an enormous amount of momentum for our business because that's exactly what we deliver to businesses, a way for them to comprehensively manage their waste recycling, save money, but ultimately massively increase their recycling."
And that momentum, Rihn said, is only likely going to continue in the future.
"The waste, solid waste and recycling industry hasn't innovated for decades, and it's just reached a boiling point where actually trying to implement a recycling program or understand what you spend and for what is a heavy lift at a company, and so we cater to that," Rihn said. "We provide a value proposition that really solves most of the key pain points or what companies are hoping to accomplish specifically in the waste industry."
Rihn declined to disclose the company's revenue figures. To date, it has raised $129.5 million since its founding.
Although local data for the fourth quarter of 2021 is not yet available, RoadRunner’s latest round breezes past capital raises by Pittsburgh tech firms reported by the PitchBook-NVCA Venture Monitor through the end of September. Only a handful topped $20 million, and the RoadRunner raise is likely the largest VC round by a Pittsburgh tech company in at least a year.
