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UK circular economy records 10% year-on-ear growth

A new report has showed another year-on-year rise in circular economy deals, reflecting an increasing understanding that climate action can mean business opportunities.

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The report, published by accountancy and corporate advisory firm BDO LLP, has disclosed that capital deployed into the circular economy reached £879m in 2022. This is up 10% on the £788m invested in the previous year, bringing the total 12month figure to £1.3bn.

In an analysis of the biggest drivers, growth capital investor BGF was the most active in the sector, with nine individual investments  on its sheets. Venture capitalists also had a big impact, accounting for 62% of all circular economy deals with an average ‘spend per cheque’ of £4.9m. Mid-market private equity investors, meanwhile, also increased activity, powering 17% of all contracts in the area.

Looking at sectors, for the second year running industrials and manufacturing were the most prominent industries looking for circular deals, claiming 37% of all signed and sealed in the analysis period. Technology, media and telecomms followed in second, with 25% of deals, and retail, consumer and leisure was third, at 21%. Theme-wise, 26% of deals were in circular inputs, 21% circular design, and 16% in material recovery.

‘Circular economy entrepreneurs are much sought-after, but they must be able to communicate a clear commercial growth plan including quantifying the addressable target market and why consumers or businesses will transition to their product or service over existing linear options or other new circular alternatives,’ said Todd Mills, Assistant Director at BDO LLP.

‘At the same time, investors must continue to recognise that circular economy entrepreneurs are often equally focused on profit and sustainability, and that to motivate these business owners, they must be on the same page. Our role is to bridge the gap between investors and entrepreneurs by ensuring that business owners can turn circular ideas or concepts into an investment-ready opportunity,’ he added.

More on the circular economy: 

Recycling, reuse and circular projects dominate Eco-I NW Awards

Scotland’s deposit return scheme to go ahead despite business fears

Feature: The Circular Economy is not a hard sell

Image: Josh Power

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