Plastic packaging, predominantly made from polypropylene (PP) and polyethylene terephthalate (PET), has a low service life and is currently the main purpose of synthetic polymers. A lot of effort has been made to keep this valuable resource within a material cycle, however, a significant decrease in many material properties is usually observed, which is also referred to as downcycling. In contrast, the subject of this work is to explore the potential of recycled thermoplastics for upcycling processes using them as thermoplastic matrix in fiber-reinforced composites. Therefore, different types of recycled PP (rPP) and PET (rPET) were characterized in terms of viscosity and molecular weight to be used in a polymer melt spinning process that is combined with a glass fiber spinning line to enable the manufacturing of hybrid yarns. The comparison of unidirectional rPP and virginPP-based composites by using the hybrid yarns reveals a slight decrease in composite performance, serving as a first benchmark for such an approach.