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Jackson, Miss.-based Intechra has been able to use private equity capital to help fund its expansion efforts, including a $30 million investment funded in part by SJF Ventures, Durham, N.C. Such investments are growing in the recycling industry, with electronics recyclers enjoying considerable investor interest. Intechra, for example, has received $50 million in private equity funding in the last two years.

Chip Slack, CEO of Intechra, says private equity firms are intrigued by the electronics recycling industry because of its growth potential and the prospective returns they can realize on their investments.

SJF Ventures began investigating the electronics recycling industry nearly three years ago, says David Griest, SJF Ventures managing director. The company was intrigued by the highly fragmented industry’s growth potential. "Everything I’ve seen says only 10 to 15 percent of used electronics are being disposed of or recycled correctly," Griest says. "Clearly there is huge market potential."

SJF was attracted to Intechra in particular because of its strategic approach to growth. "It was clear they had a growth strategy to scale the company nationwide, which was attractive," Griest says. "It is a very high quality, professionally led company with a deep management team and pretty high growth expectations, which they have done an excellent job of achieving."

As a venture capital fund, SJF Ventures focuses on the cleantech, technology-enhanced services and premium consumer products sectors. While Intechra has other private equity financing, SJF is the only fund that has sought out cleantech companies to invest in, Griest says. "We have some great co-investors," he says, "but they are all more traditional business services investors, which Intechra also falls into." Richland Ventures, Oxford Bioscience Partners, Chrysalis Ventures, First Avenue Partners and Sewanee Partners are among Intechra’s investors.

Intechra’s Slack says the company has learned a lot about private equity funding in the last two years. "I think we have learned from experience to match the investor with the investment in terms of their expectations in addition to their understanding of the industry and level of expertise," he says. "It also gives you the opportunity to learn in terms of having different types of investors that have a little bit different interest and view point on the industry."

SJF Ventures is an expansion-stage fund, meaning it invests in companies that have at least $1 million in historical revenue and that have shown commercial traction, Griest says. "We don’t do seed stage or concept investing. We are looking for companies that have achieved validation of their services in the market and are seeking capital to expand their services."

A limited-life fund, SJF’s typical holding period for an investment is five years. However, Griest says SJF has not ruled out additional investments in Intechra. "There are certainly other acquisition opportunities that the company is considering, so we are considering possible sources of funding to do that, which could include another round of financing."