Octopus keeps things out of overcrowded landfills in Indonesia

According to the World Bank, Indonesia produces 4.8 million tons of plastic waste every year that is "mismanaged", i.e. ends up uncollected , dumped in landfills or escaping from poorly managed landfills. Octopus wants to reduce that number with a platform that makes it easier to collect consumer waste and recycle it into raw materials that brands can reuse. The Jakarta-based startup announced today that it has raised an oversubscribed $5 million seed round led by Openspace and SOSV.

Octopus was founded last year by Mohammad Ichsan, Hamish Daud, Niko Adi Nugroho, Rizki Mardian and Dimas Ario, who have known each other for over a decade.

Following its recent launch in Jakarta, it will use its new funding for an "aggressive expansion", including five sorting facilities and 1,700 checkpoints in four cities: Jakarta, Bandung, Bali and Makassar, with the aim of processing 380 tonnes of waste, ranging from plastics to electronics, every month.

Ichsan said that one of the reasons he founded Octopus was that he went back to vacation at his parents' house in Makassar and discovered that a landfill 30 kilometers away had an unbearable smell, especially since he had a newborn daughter.

“I wondered what kind of world she was going to live in,” he told TechCrunch. "Apparently, this problem does not occur in some cities, but also in other cities in Southeast Asia, so I started to explore the business more by doing manual trash trading and trying to solving the problem one step at a time, starting with reducing recyclable waste that ends up in landfills by doing manual trade in waste.”

At this time, Ischan met co-founder Daud, who had similar concerns and had done research on ocean litter.

Octopus also draws attention to the Indonesian government's collective waste regulations called 3R, or "reuse, reduce and recycle", which aim to reduce the amount of plastic waste in the ocean by 70%. The government has reinforced these targets with initiatives such as waste banks, enforcement of recycling targets for brands and producers, and a tax on plastic bags for consumers.

Octopus claims that by 2025, the Indonesian government will have spent $5.1 billion to create a circular economy for more brands. It claims to be "the first platform to offer an end-to-end recyclable waste management logistics platform".

The company says that in the last six months it has grown by more than 400%, with users at both ends of the supply chain. This includes 150,000 monthly users and over 60,000 pelestari, or independent waste collectors. He claims that over 12,000 pelestari have been able to open a bank account since joining Octopus. At the other end of the supply chain, Octopus serves more than 20 brands, including global FMCG companies that use Octopus to help them meet their ESG compliance. One of its goals is to reach 100,000 pelestari by 2024.

Octopus offers two main types of services, Ischan said. The first is the sale of post-consumer materials to the recycling industry and the second is data collection reporting for FMCG brands. For example, it helps Softex Indonesia collect used diapers from consumers with proper handling standard operating procedures from pelestari, who operate as gig workers.

For pelestari who don't have a cell phone to access Octopus's app, Ischan said the company is working with welfare offices to provide phones for city government programs to solve unemployment in their regions.

In a prepared statement, Openspace Founding Partner Shane Chesson said, “Octopus is leading the way in using technology to create a sea change in the scale of the circular economy in Indonesia. Participants at all steps in this supply chain have the incentive to make it happen and, more importantly, environmental imperatives need us to get it right."