If We Were Starting a Waste Startup in Indonesia, Here Is Where We Would Look

Indonesia produces a lot of waste.

Government data puts national waste generation in 2023 at 56.63 million tonnes, with only 39.01% classified as managed.

Food waste represented 39.87% of composition, while plastic accounted for 19.16%. Households alone represented more than half of waste generation.

Those numbers make the category look enormous.

But enormous waste volume does not automatically mean enormous startup economics.

Big problems and good business models are not the same thing.

A startup still needs:

a customer,

willingness to pay,

attractive unit economics,

repeatable operations,

and eventually some form of defensibility.

So if we were building in Indonesia’s waste economy, we would not begin with:

“How do we convince everyone to recycle?”

We would begin with:

Who already has a painful waste problem, who increasingly has responsibility for solving it, and who has a budget?

That produces a very different opportunity map.

1. B2B waste collection for dense commercial clusters

This is probably where we would start.

Hotels.

Restaurants.

Malls.

Office buildings.

Supermarkets.

Central kitchens.

Factories.

Apartment complexes.

These are more attractive than scattered individual households for one simple reason:

waste is a density business.

One household produces relatively little value per pickup.

One apartment building concentrates hundreds of households into one location.

One restaurant may not justify a route.

A dense restaurant district may.

One store produces limited cardboard.

A mall produces a predictable supply stream.

The business could combine:

collection fees,

sorting,

material resale,

reporting,

and potentially compliance services.

The more density the operator creates, the better the route economics can become.

If we were testing a waste startup tomorrow, we would probably begin with concentrated B2B or B2B2C supply rather than citywide household collection.

2. Producer-responsibility infrastructure

This may become the biggest structural opportunity.

Indonesia’s Ministry of Environment said in July 2026 that it is preparing a new Extended Producer Responsibility regulation that would require producers to take greater responsibility for waste created by their products and packaging.

The government has said implementation may involve Packaging Recovery Organisations, with producers helping finance the waste-management system.

This matters commercially.

Because waste businesses often suffer from a fundamental question:

Who pays?

Consumers generally do not want to pay much.

Commodity resale often cannot fund the full cost of recovery.

Municipal budgets are limited.

EPR can introduce something different:

a customer with both responsibility and budget.

If brands are required to fund or verify post-consumer recovery, they may increasingly need:

collection partners,

aggregation networks,

recovery services,

traceability,

reporting,

verification,

and compliance infrastructure.

That could create an entire layer of businesses around producer responsibility.

3. Waste traceability and compliance software

Once somebody becomes responsible for recovering waste, the next problem is proving that the recovery actually happened.

How much material was collected?

Where did it come from?

Who transported it?

Who processed it?

What happened to it?

Was it actually recycled?

Can a brand claim it toward its obligations?

That creates a software opportunity.

We would be interested in something closer to an operating system for waste recovery than another consumer recycling app.

The platform could connect:

brands,

collectors,

aggregators,

processors,

and regulators.

The physical operators do the work.

The software layer creates traceability and coordination.

If EPR becomes meaningfully enforced, that data may become increasingly valuable.

4. Food-waste infrastructure

Plastic receives most of the startup attention.

But food represents 39.87% of Indonesia’s national waste composition in the cited 2023 dataset.

That makes food waste impossible to ignore.

Potential models include:

commercial food-waste collection,

composting,

Black Soldier Fly processing,

bioenergy,

and other organic recovery systems.

But food waste is operationally difficult.

It is:

heavy,

wet,

perishable,

and contamination-sensitive.

That means logistics matter even more.

A processor located close to:

traditional markets,

hotels,

restaurant clusters,

central kitchens,

supermarkets,

or food factories

may have much better economics than one attempting broad household collection.

Food waste may ultimately be a hyperlocal infrastructure business before it becomes a national one.

That is not necessarily a weakness.

5. Aggregation instead of owning the recycling plant

One common assumption in waste startups is that value sits in the recycling technology.

Sometimes it does.

But we would also explore whether the stronger position is simply owning access to supply.

Indonesia already has a fragmented collection ecosystem.

Collectors.

Waste banks.

Aggregators.

Processors.

Recyclers.

Brands.

Municipal actors.

The opportunity may be to connect them more efficiently.

Imagine controlling reliable volumes of relatively clean material across hundreds of locations.

Downstream processors increasingly depend on you for feedstock.

Brands depend on you for verified recovery.

Collectors depend on you for demand.

The moat may sit in aggregation rather than processing.

This can also reduce capital intensity versus owning heavy recycling infrastructure from day one.

6. Reverse logistics for consumer brands and retailers

There is another model we think is underexplored.

Consumer brands already spend enormous amounts building forward distribution.

Factory.

Warehouse.

Distributor.

Store.

Consumer.

Waste requires some of that infrastructure to work backwards.

Return packaging.

Collect used materials.

Consolidate them.

Route them to processing.

This could create interesting partnerships with:

retail chains,

FMCG brands,

e-commerce networks,

quick-commerce players,

malls,

and convenience stores.

A network that already handles products at high density may eventually become useful for recovering material too.

Indonesia’s waste problem is partly a reverse-distribution problem.

That is why logistics operators may ultimately matter just as much as recycling companies.

What we would avoid first

There are also models we would approach carefully.

Consumer recycling apps without a clear payer

Engagement does not solve willingness to pay.

Businesses relying entirely on commodity resale

Material prices fluctuate, while collection costs remain real.

Low-density household pickup

Poor route economics can destroy the model before technology has a chance to help.

Heavy processing capex without secured feedstock

A great recycling plant is not useful if it cannot consistently source enough clean material.

Marketplaces without economic urgency

Connecting buyers and sellers only works if both sides already have a strong reason to transact.

A huge TAM can make all of these look attractive on slides.

TAM does not fix weak unit economics.

What we would ask before investing

If someone pitched us a waste startup in Indonesia, our first question would not be:

How large is Indonesia’s waste problem?

We already know it is large.

We would ask:

Who pays?

Then:

How dense is collection?

What is revenue per pickup?

What is cost per kilogram?

How much material has resale value?

How contaminated is the feedstock?

Are buyers contracted?

Is supply contracted?

How much revenue comes from service fees versus volatile commodity prices?

Does regulation structurally strengthen demand?

Can the business survive without ongoing subsidy?

These questions determine whether the environmental opportunity can actually become a business.

Regulation makes the timing more interesting

There is a reason we think this category is becoming more interesting now.

Indonesia is not only discussing EPR.

The government has also created a new framework for urban waste processing through Presidential Regulation No. 109/2025, which covers technologies capable of converting waste into electricity, bioenergy, renewable fuels and other outputs.

Separately, the Ministry of Environment says the proposed producer-responsibility framework is intended to shift more financing responsibility toward industry rather than relying only on government budgets.

We would not assume regulation automatically creates successful startups.

Implementation will determine a lot.

But it changes the structural direction.

More waste needs to be managed.

More responsibility may move toward producers.

More verification will likely be required.

And somebody will need to build the infrastructure underneath that.

Our Conviction

We think waste could become a genuinely interesting startup category in Indonesia.

But the winners may not look like sustainability brands.

They may look like:

logistics businesses,

software businesses,

compliance businesses,

material aggregators,

and physical infrastructure operators.

The biggest opportunity may not be convincing Indonesian consumers to care more about waste.

It may be building businesses around the organisations that increasingly have to care.

If we were starting today, our sequence would be simple:

Find concentrated waste.

Find a responsible payer.

Build density.

Then layer technology on top.

That feels like a much stronger starting point for building a real waste company in Indonesia than starting with the environmental problem alone.