A few years ago we set out to build the strategy for what is today the Greater London Investment Fund (GLIF); a fund of funds comprising one equity and two loan funds backing London based SMEs.  Backers included Greater London Authority, European Investment Bank and the then LWARB now ReLondon.

As with all our funds, we seek to support areas of strategic importance to London.  So one of the principal goals for the equity fund was to channel at least £14m of funds provided by ReLondon to support the development and growth of Circular Economy business models.  At the time, it was difficult to imagine what these business models would be.  The definition of Circular Economy occupied five or six paragraphs.  There were few examples around: sharing economy examples (e.g. Airbnb, UBER) or businesses focused on recycling waste.   It was difficult to imagine what “recycle and reuse” by design really meant.

Today, ReLondon’s website define the Circular Economy as follows:

A circular economy is one in which stuff is kept in use for as long as possible, delivering the highest value it can, for as long as it can. So rather than making, using and then throwing stuff away (a linear system), a circular economy means looking at each of those stages for new ways of cycling materials and value back into the system – using materials and products again and again, in many different forms.

The infinite possibilities allowed by this definition are certainly coming to life in the investments that have been made to date by our equity fund, managed by MMC Ventures.  Looking at the portfolio of eight Circular Economy businesses that they have built since launch in May 2019, three “headings” come to mind:

1. Sharing and Reusing
2. Efficiency, Waste Reduction and Sustainability
3. Enabling Net Zero Carbon

The eight portfolio companies so far are certainly described by at least one if not all of the three concepts above.  Another common theme among these eight is that at the core of each model, there is a re-imagining of established processes and in many instances Artificial Intelligence plays a part.

Qflow aims to drastically reduce the impact construction work has on the local and global environment. Qflow automates the data capture and analysis for key compliance areas in construction, eliminating the need for manual data handling and enabling teams to focus on value-add activities.

Unmade is reinventing fashion design and manufacturing.  By integrating Unmade’s software into industrial machines, brands need only produce what is actually sold, supporting a more sustainable, ethical economy.

Recycleye is accelerating the transition towards a circular economy by providing machine learning tools to enable smarter characterisation, ubiquitous tracking and automated sorting of waste.

SLAMcore helps autonomous vehicles to position themselves and understand their surroundings.  SLAM core’s solution uses simpler sensors to achieve the same complex goal. This tech is accelerating innovation across dozens of sectors.

Whirli is a fully flexible sharing platform for toys.  Parents can choose toys from a wide range of categories and brands including Le Toy Van, Melissa & Doug, Fisher Price, VTech, Micro Scooters and many more.  Parents get better value for money, children see more variety at play and the environmental footprint is lowered.

Gardin is a real-world operating system that will power the future of farming by helping food producers deliver superior yields, nutrition and quality. A complete closed-loop growth and nutritional optimisation platform for all crop production.

Pesky Fish have introduced the first end to end marketplace built on absolute transparency – enabling fishermen to market and benefit from selling their catch to every customer in the chain at the same time.  This will lead to a better more sustainable seafood industry for fish, fishermen and consumers.

Satis AI is an operating system to increase throughput, minimise order mistakes and reduce waste in food production.

Source: MMC VC website

Backing CE companies to develop ideas into scalable models

Our mission at Funding London is to focus funding and resources where there are clear finance gaps.  At the planning stages of GLIF, there was a conviction that given the very new, unproven business models that were likely to emerge in the Circular Economy space, there was an expectation that we would need to extend the Investment Strategy into the earliest stages, e.g. proof of concept/pre-seed whilst allow support for portfolio companies through to Series A and B.

GLIF’s equity fund manager, MMC Ventures rose to the challenge with the creation of the MMC Labs strategy:

MMC Greater London Labs companies are those backed at the earliest stage of their journey. Predominately pre-seed, Labs investments support promising entrepreneurs as they test and develop their product.

Whilst the MMC Labs strategy is not exclusive to the Circular Economy, it is pleasing to see that 40% of the companies in the Labs portfolio are Circular Economy business models.

Two years on, MMC has invested £3.7m alongside a further £14.3m from co-investment partners.

A great start, an exciting future

We are excited to see our Circular Economy portfolio plough the way.  The portfolio companies are already being recognised.  For example, Pesky, Whirli and Recycleye, were all named as cool sustainable tech startups doing their part to save the planet by UKTN. Recycleye also teamed up with Microsoft and created a video bringing transparency to the waste management industry.

No doubt, this is a great beginning to a great movement.  We are extremely excited to have had a part in making it happen.

Watch this space