Shay Sethi sorts boxes of old t-shirts and sweaters in his small factory near downtown L.A. His startup, ambercycle, recycles old polyester garments to create new fabric and has caught the attention of socially conscious consumers from around the world. Many regularly send him their worn pants and used jackets.

"This is insanity. We're not even doing any marketing" said the 27-year-old co-founder, who says he receives the unsolicited packages weekly.

The L.A. company might not be a household name, but it has pocketed millions in government grants and venture capital, and made a deal with clothing retail giant H&M to make recycled clothes.