What are the best circular economy startups?
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The circular economy startup landscape in 2025 is experiencing unprecedented growth, with USD 40-45 billion invested in 2024 and over USD 20 billion already deployed in the first half of 2025.
Battery recycling and advanced materials upcycling companies are leading both funding rounds and technological innovation, while regions like North America and Europe continue to dominate investment flows. The sector has matured significantly, attracting major corporate venture arms and specialized impact funds that recognize the massive commercial potential of waste-to-value business models.
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Summary
Battery recycling and advanced materials startups dominate 2025's circular economy investment landscape, with total funding approaching record levels and European companies leading innovation in enzymatic recycling and AI-powered waste analytics.
| Key Metric | 2024 Performance | 2025 Outlook & Trends |
|---|---|---|
| Total Global Funding | USD 40-45 billion (near 2021 peak) | USD 20-22 billion YTD, tracking for record year |
| Leading Sectors | Battery storage (40%), Packaging (25%) | Continued dominance with enzymatic recycling breakthroughs |
| Top Regional Hubs | Europe (35-40%), North America (25-30%) | Asia gaining momentum with textile and agro-waste innovations |
| Largest Single Round | Northvolt EUR 4.6bn debt financing | Mega-rounds continuing in battery recycling space |
| Key Technologies | Chemical recycling, AI waste management | Power-to-X CO2 conversion, solid-state battery repurposing |
| Business Model Leaders | Product-as-a-Service, Platform marketplaces | Industrial process licensing gaining traction |
| Corporate Involvement | Partnerships with Unilever, Amazon, Google | Expected major acquisitions in H2 2025 |
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DOWNLOAD THE DECKWhat are the most promising circular economy startups globally in 2025, and what exactly do they do?
The most promising circular economy startups in 2025 focus on battery recycling, advanced materials upcycling, and AI-powered waste optimization rather than traditional recycling approaches.
| Startup | Location & Focus | Technology & Market Approach |
|---|---|---|
| Rebaba | Stockholm, Sweden - EV Battery Repurposing | Converts end-of-life EV batteries into grid-scale energy storage using proprietary thermal control systems, addressing the growing pile of retired Tesla and Nissan batteries |
| MacroCycle Technologies | Cambridge, USA - Circular Plastics | Recycles PET and polyester waste into virgin-grade polymer using energy-efficient cyclic macromolecule synthesis, competing directly with virgin plastic producers |
| C+UP | Chicago, USA - Carbon Upcycling | Power-to-X process converting industrial CO₂ emissions into propane, propylene and chemical feedstocks, monetizing waste streams for heavy industry |
| The Paze | Stuttgart, Germany - Packaging-as-a-Service | Automated, reusable inflatable packaging solution reducing waste and shipping volume by up to 60% for e-commerce and logistics companies |
| Black Square | London, UK - Waste Intelligence | AI-powered platform mapping waste streams and financial modeling for material recovery projects, enabling cities to optimize waste-to-energy investments |
| GoNina | Zurich, Switzerland - Surplus Food | AI-driven marketplace for restaurants and retailers to forecast and sell surplus food at discounts, reducing food waste by 40-70% for participating businesses |
| Insutex | Copenhagen, Denmark - Textile Insulation | Converts discarded textiles into construction insulation granules with thermal performance matching traditional materials at 30% lower cost |
These startups differentiate themselves through proprietary technology rather than labor-intensive sorting or basic mechanical recycling. Rebaba, for instance, has developed thermal management systems that extend battery second lives to 15-20 years compared to 5-8 years with conventional approaches.
Which startups raised the most funding in 2024 and so far in 2025, and from whom?
Battery-focused companies dominated the largest funding rounds, with debt financing becoming increasingly popular for scaling manufacturing operations.
Northvolt secured the largest single round with EUR 4.6 billion in debt financing from ING Group, followed by Verkor's USD 4 billion debt round also backed by ING. These mega-rounds reflect investor confidence in battery recycling's commercial viability and the capital-intensive nature of building recycling facilities.
OpenAI's USD 1 billion Series E from Kohlberg Kravis Roberts included significant AI applications for waste management optimization. DeepGreen raised GBP 200 million from Octopus Ventures for deep-sea mineral extraction technologies that support circular battery supply chains.
Smaller but significant rounds included Cirtec's EUR 150 million growth equity for chemical recycling, Ineratec's EUR 118.7 million for Power-to-X technologies, and Hydraloop's EUR 77 million Series B for residential water reuse systems. Re-Fresh Global secured a USD 15 million EU Horizon grant for enzymatic textile recycling, demonstrating strong government support for breakthrough technologies.
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Which VCs, corporate venture arms, or major players are actively backing circular economy ventures?
Specialized impact funds and energy-focused VCs lead circular economy investments, with corporate venture arms increasingly active in strategic partnerships.
EIT InnoEnergy tops the list with 70+ deals in energy storage and battery recycling, leveraging deep technical expertise and European policy connections. SOSV follows with 60+ investments in biotech materials and chemical recycling, particularly strong in Asian markets. Breakthrough Energy Ventures has completed 50 deals in regenerative materials and carbon capture, backed by Bill Gates' climate focus.
European players Speedinvest and Katapult each completed 40 deals, with Speedinvest focusing on reuse marketplaces and packaging solutions while Katapult emphasizes early-stage upcycling technologies. These funds typically invest EUR 1-10 million in Series A and B rounds.
Corporate venture involvement includes Google Ventures' early stake in CarbonCure for concrete carbon mineralization, Unilever Ventures' investment in Loop Industries for advanced PET recycling, and Amazon's Climate Pledge Fund backing multiple upcycling and carbon capture startups. The European Investment Bank allocated EUR 11.6 billion through its JICE initiative, while Goldman Sachs, JPMorgan, and ING co-invest in larger debt and equity rounds.
How much total funding has been invested into circular economy startups in 2024 and in 2025 to date, and how does that compare to previous years?
Global circular economy startup funding reached USD 40-45 billion in 2024, nearly matching the 2021 peak of USD 42 billion, with 2025 tracking for a record year.
The 2024 figure represents a 43-61% increase from 2023's USD 28 billion, demonstrating strong recovery from pandemic-related corrections. Europe led with 35-40% of global funding, followed by North America at 25-30%, Asia at 20-25%, and emerging markets capturing the remainder.
YTD 2025 stands at USD 20-22 billion through the first half, putting the year on pace to exceed USD 45 billion if current momentum continues. The funding acceleration reflects several factors: proven commercial viability of advanced recycling technologies, supportive government policies like the EU's Green Deal, and growing corporate adoption of circular procurement practices.
Historical context shows dramatic growth from the USD 10 billion baseline in 2018, representing a 4-4.5x increase over six years. The 2021 peak of USD 42 billion included significant SPAC activity and pandemic-driven sustainability focus, while 2024-2025 funding reflects more mature due diligence and commercial traction.
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DOWNLOADWhich of these startups have received awards, recognitions, or government grants for innovation or sustainability?
European government grants and innovation awards dominate startup recognition, with EU Horizon Europe leading major funding programs.
Re-Fresh Global secured the most significant recognition with a €15 million EU Horizon Europe grant for enzymatic textile recycling technology that achieves >90% fiber recovery from poly-cotton blends. This grant validates their breakthrough approach to textile waste, traditionally considered non-recyclable.
Hydraloop has received multiple sustainability awards for residential water-reuse systems, including recognition from the Dutch government and EU innovation programs. Their technology enables 85% water recycling in residential applications, addressing both waste reduction and water scarcity.
The Konree Innovation program distributed €650,000 in grants to 13 Irish circular economy projects via Community Foundation Ireland, supporting early-stage companies in packaging, electronics, and food waste sectors. The Eureka Network offers international R&D funding to consortia across 18 countries, particularly supporting cross-border collaboration in advanced materials and chemical recycling.
Government support extends beyond grants to policy frameworks. Several startups benefit from extended producer responsibility (EPR) regulations that create revenue streams for their recycling services, while carbon pricing mechanisms improve the economics of CO2 upcycling technologies.
Are there any circular economy startups backed or acquired by giants like Google, Amazon, Unilever, Nestlé, or other major industrial players?
Major corporations actively partner with and invest in circular economy startups, but full acquisitions remain limited as companies prefer strategic partnerships over ownership.
Google Ventures holds an early stake in CarbonCure, which mineralizes CO2 into concrete, reducing cement's carbon footprint by 15-20%. Amazon's Climate Pledge Fund has invested in multiple companies including Upcycled Foods for food waste valorization and several carbon capture startups focused on direct air capture technologies.
Unilever Ventures invested in Loop Industries for advanced PET recycling that breaks down plastic to molecular level for infinite recycling. Nestlé formed a strategic partnership with Sulapac for biodegradable wood-based packaging that maintains food safety while eliminating plastic waste in consumer products.
Notably, no major acquisitions of pure-play circular economy startups by Big Tech companies were announced through H1 2025. This reflects corporate preference for partnerships that provide access to innovation without integration complexity. Companies like Nike, Adidas, and H&M maintain innovation labs that partner with textile recycling startups while retaining flexibility to work with multiple technology providers.
The partnership approach allows corporations to test multiple technologies simultaneously before committing to long-term supplier relationships, while startups maintain independence to serve multiple large customers.
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What regions or countries are producing the most high-performing or well-funded circular economy startups right now?
Europe leads in both startup density and funding concentration, while North America dominates large-scale industrial applications and Asia excels in textile and agricultural waste innovations.
The United States and Canada focus on battery recycling, bio-materials, and digital platforms, with strong venture capital ecosystems supporting scale-up phases. Silicon Valley and Boston concentrate on AI-powered waste optimization and advanced chemistry, while the Midwest specializes in industrial CO2 conversion technologies.
Europe, particularly Germany, Sweden, Netherlands, and the UK, leads in packaging biopolymers, chemical recycling, and mobility solutions. The region benefits from supportive EU policies, established chemical industry infrastructure, and consumer willingness to pay premiums for sustainable products. German engineering expertise drives packaging automation and recycling equipment innovation.
Asia shows strength in textile recycling, agro-waste processing, and smart waste management, with India, China, and Japan leading different segments. India focuses on agricultural waste conversion, China on electronics recycling and rare earth recovery, and Japan on precision manufacturing for circular supply chains.
Africa, led by Kenya and South Africa, specializes in agro-biomaterials and localized recycling services that address both environmental and economic development goals. These startups often develop lower-cost solutions suitable for emerging market conditions.
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What major technological breakthroughs or R&D achievements have emerged in this space in 2025?
Four major technological breakthroughs are reshaping circular economy capabilities: enzymatic polymer recycling, AI-IoT waste analytics, Power-to-X carbon conversion, and advanced biopolymers matching petrochemical performance.
Enzymatic polymer recycling achieves >90% fiber recovery for poly-cotton blends, previously considered non-recyclable due to the difficulty of separating natural and synthetic fibers. Companies like Re-Fresh Global use engineered enzymes that selectively break down polyester while preserving cotton fibers, creating separate high-quality input streams.
AI-IoT waste analytics platforms create "Internet of Waste" systems that optimize material recovery routes in real-time. Smart sensors track waste composition, contamination levels, and transportation efficiency, enabling dynamic routing that increases recovery rates by 25-40% while reducing collection costs.
Power-to-X carbon upcycling converts industrial CO₂ emissions into fuels and chemical feedstocks at commercial scale. C+UP's technology produces propane and propylene from captured CO2 using renewable electricity, creating revenue streams from waste carbon rather than just storage costs. Early commercial plants demonstrate 80-85% conversion efficiency.
Advanced biopolymers from seaweed and fungal sources now match petrochemical plastic performance in strength, flexibility, and barrier properties. These materials biodegrade completely in marine environments within 6-24 months while maintaining functionality equal to conventional plastics during use.
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DOWNLOADWhich startups are working on or expected to release significant tech or product innovations in 2026?
Major product launches expected in 2026 focus on automated manufacturing systems, modular repair platforms, and blockchain-enabled traceability rather than incremental improvements to existing technologies.
2nd Cycle FlexCo will launch their next-generation PV recycling system featuring fully automated module disassembly lines that process 1,000 panels per day with 95% material recovery. This addresses the growing wave of solar panel retirements as first-generation installations reach end-of-life.
Modular repair-as-a-service platforms in electronics will leverage AI diagnostics to enable component-level repairs rather than device replacement. These platforms use machine learning to predict failure modes and automatically order replacement parts, extending device lifespans by 3-5 years.
Solid-state battery second life applications will be piloted by EV incumbents in partnership with energy storage companies. These batteries maintain 80-90% capacity after automotive use and can serve grid storage applications for an additional 10-15 years, dramatically improving battery lifecycle economics.
Circular fashion platforms integrating blockchain technology will provide end-to-end traceability from fiber source through multiple use cycles. Consumers will track garment history, verify sustainability claims, and participate in take-back programs that guarantee material recovery for new production.
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What sectors within the circular economy are currently receiving the most investment and momentum?
Battery and energy storage dominates investment with ~40% of 2024 funding, driven by EV adoption and grid storage needs, while packaging and plastics capture ~25% through biopolymer innovations.
| Sector | 2024 Funding Share | Investment Drivers & 2025 Momentum |
|---|---|---|
| Battery & Energy Storage | ~40% | Continued mega-rounds for recycling facilities and second-life applications. EV battery retirements creating massive input streams. Grid storage demand driving stationary battery reuse. |
| Packaging & Plastics | ~25% | Biopolymer breakthroughs achieving cost parity with petrochemicals. Reusable packaging platforms scaling in e-commerce. EPR regulations creating revenue streams. |
| Chemical & Advanced Recycling | ~15% | Enzymatic and molecular recycling achieving commercial viability. Chemical companies investing in feedstock security. Carbon pricing improving economics. |
| Food & Agriculture | ~10% | AI-powered surplus management reducing waste 40-70%. Bio-food upcycling creating premium ingredients. Agro-waste biomaterials for packaging and textiles. |
| Electronics & Mobility | ~10% | Rare earth recovery becoming profitable. Shared mobility models reducing vehicle production. Repair-as-a-service extending device lifespans. |
The battery sector benefits from converging trends: rapid EV adoption creating future waste streams, grid modernization requiring storage solutions, and proven recycling technologies achieving 95% material recovery. Chemical recycling gains momentum as traditional mechanical recycling reaches capacity limits and contamination challenges.
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Which startup business models are proving to be the most scalable or profitable in this space so far?
Product-as-a-Service and platform marketplace models demonstrate the highest scalability, while industrial process licensing offers the best profit margins for technology developers.
- Product-as-a-Service (PaaS): The Paze's packaging-as-a-service model achieves 60-80% gross margins by retaining ownership of reusable packaging while charging per-use fees. This model scales rapidly as customer acquisition costs are low and usage increases with e-commerce growth.
- Platform Marketplaces: GoNina and Black Square operate asset-light platforms connecting waste generators with processors. They capture 5-15% transaction fees while users provide inventory and logistics, enabling rapid geographic expansion with minimal capital requirements.
- Upcycling Manufacturing: MacroCycle and Rethread Africa control proprietary conversion processes, selling processed materials at 20-40% premiums to virgin alternatives. Higher capital requirements but defensible technology moats and recurring revenue from long-term supply contracts.
- Industrial Process Licensing: C+UP licenses Power-to-X technology to industrial companies, earning upfront fees plus ongoing royalties. This model scales globally without manufacturing investment while maintaining high margins through IP protection.
- Refurbishment Facilities: 2nd Cycle FlexCo operates specialized facilities processing specific waste streams with automated equipment. Capital-intensive but predictable cash flows from processing contracts and recovered material sales.
The most successful startups combine multiple models, starting with licensing or PaaS for rapid scaling, then adding manufacturing capabilities for margin expansion once market traction is proven.
Who are the founders or leadership teams behind the most successful startups, and what's their background or track record in sustainability or tech?
Successful circular economy founders increasingly combine deep technical expertise from traditional industries with sustainability experience, often as serial entrepreneurs or former Tesla, chemical company, or academic researchers.
Many founders are chemical engineers who previously worked at companies like BASF, Dow, or ExxonMobil before founding circular economy startups. C+UP's leadership includes former petroleum engineers who developed carbon conversion expertise in oil and gas before applying it to CO2 upcycling. This industry experience provides crucial understanding of industrial-scale operations and regulatory requirements.
Former Tesla engineers feature prominently in battery recycling startups like Rebaba, bringing expertise in battery chemistry, thermal management, and automotive supply chains. Their insider knowledge of EV production challenges helps design recycling processes that recover materials suitable for new battery production.
Academic spin-outs dominate advanced recycling technologies, with ETH Zurich supporting GoNina's AI development and MIT connections driving MacroCycle's polymer chemistry innovations. These founders combine research breakthroughs with business acumen developed through university entrepreneurship programs.
Female leadership representation increases significantly in European biopolymer and reuse-platform startups, often with backgrounds in consumer goods, fashion, or food industries. Their market knowledge helps develop products that meet actual consumer needs rather than purely technical solutions.
Serial entrepreneurs who previously founded sustainability or cleantech companies bring valuable experience navigating regulatory approval, scaling manufacturing, and corporate partnership development that proves crucial for circular economy success.
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Conclusion
The circular economy startup ecosystem in 2025 represents a fundamental shift from experimental sustainability projects to commercially viable industrial solutions, with USD 40-45 billion in annual funding validating the sector's maturity.
Battery recycling and advanced materials upcycling lead both investment and innovation, while emerging technologies like enzymatic recycling and Power-to-X carbon conversion position 2026 for breakthrough commercial deployments that will reshape how industries handle waste streams.