Austin-based Newmarket IT, which has built a company by reselling lease-return Dell and other PC computers, servers and memory, has raised $50 million from investment firm Catterton Partners for expansion outside of Texas.

It's one of many companies getting into the $1.5 billion electronic waste business, which industry analysts say is growing at 45 percent annually.

The growth is being driven by a surge in recycling as computer makers — including Dell Inc., Hewlett-Packard Co. and Apple Computer Inc. — have begun taking back their old machines. In June, Dell said it would provide free recycling services for all its products worldwide. Previously, it offered free recovery only with the purchase of new products, as most of its competitors do now.

Environmental groups and regulators have been pushing computer companies to pay as much attention to the products they sold in the past as they do to selling new products. Today, just 10 percent of computers, cell phones and other electronics are recycled, according to the International Association of Electronics Recyclers.

Michael Farello of Catterton Partners says the recycling business is highly fragmented. Some 400 companies, most of them tiny, operate in the U.S. electronics recycling market, according to the trade association.

"This infusion of capital will give Newmarket the firepower it needs to establish a stronger national presence, build an international presence and launch new services for products like cell phones and PDAs," said Farello, who is on Newmarket's board.

Newmarket has operations in Austin and Richmond, Va., and plans to expand to Reno, Nev., and the Midwest later this year. Many of Newmarket's sales are now abroad.

Farello knows the PC business firsthand. Prior to joining Catterton in January, he was vice president of Dell's U.S. consumer marketing and eBusiness. Newmarket recently added another Dell veteran to its ranks: Jake Player, former head of Dell's Asset Recovery Services, has signed on as president.

Founded in 1999, Newmarket began as a computer leasing company. But it quickly shifted gears to recycling during the tech downturn, when demand for leased PCs plunged.

It now processes 3,500 machines a day at its Austin plant, erasing data from them and refurbishing those that can be resold to corporate customers and international markets. Machines that can't be salvaged are broken down for their spare parts or raw materials, which also are resold.

Newmarket soon will more than double its production in Austin, when it moves to a new 120,000-square-foot facility where Dell computers once were assembled.

The company has 150 employees in Austin and is hiring more, although it didn't say how many.

The infusion from Greenwich, Conn.-based Catterton is its first outside investment. Newmarket doesn't disclose financial information, but CEO Jeff Ziegler said it is profitable.

Considering that more than 150 million machines will be sold worldwide this year, there is enormous of room for growth, Zeigler said.

"We're not just talking about what shipped out this year. We're talking about what sold three, four, five years ago," he said. "There are tens of millions of boxes stacked in closets, just waiting to be recycled."