Circular Factory supporter Invest-NL about the future of circular startups in the manufacturing industry: “How can we use circular strategies to create a just and liveable society for all?”

Invest-NL

Maud and Guy both work in the Business Development team, Biobased and Circular Economy of Invest-NL, together with three other colleagues. Guy (team lead): “Invest-NL invests in companies that contribute to a biobased and circular economy, and develops projects to remove barriers for scaling and growth of promising start and scale-ups. For example, obstacles in the field of legislation, financing, and collaboration. Our team is growing and the amount of activities focusing on making the Netherlands a bit more circular is increasing. We want to activate circular value chains and discover how we can assist companies within these value chains to behave in a circular way, for example with improving transparency between collaborating parties and setting up contracts throughout the value chain. This sounds great, but the reality is still volatile: we are only at the beginning of this transition.”

Making value chains circular

Invest-NL has been closely involved since the start of Circular Factory, which is running for the first time this year. Guy continues: “Circular Factory is based on creativity and craftsmanship, and works towards scaling up and industrial production. Industrial accelerator programs of knowledge institutions for example mainly cover Research & Development topics. The focus of Circular Factory on the phase between prototype to plant distinguishes the program from other accelerators. The selected startups form a very strong and nice group of entrepreneurs. There is a lot of diversity, both in terms of the background of the people as well as the themes the startups work on. We are looking forward to the continuation of the program as we work to make these companies “circular by design”. In practice, this means that eventually they will be able to take full responsibility for their products, take them back and reuse them. Hopefully at the end of this program we will have achieved that these startups will be financed and can enter the (circular) market. And also: that the entrepreneurs have the confidence that they are able to do so. We think that’s very important.”

“As Invest-NL, we work with companies to make the business cases and business plans of the startups and the value chain to which they belong fully circular, and to make them financeable. By circular value chains we mean chains in which the materials or products they produce eventually can be returned to the company. At the moment, there are hardly any companies in the Netherlands that meet this definition of circularity. Our work therefore focuses on how we can build and assist companies in such a way that they can reuse their own material as new material. The goal is that it becomes a closed loop. To encourage this shift, Invest-NL started supporting accelerator programs a few years ago. Circular Factory is one of these accelerators, where we can support startups at a crucial point to make their business operations more circular.”

The importance of industrial scale-up

According to Guy, “in recent years, a lot has changed for the better in the field of circularity.” “I expect that these trends will only continue. This means that the relevance of Circular Factory will continue to exist. In 2015 and 2016 a lot of legislation stimulating circularity has been developed in Europe, and subsequently in the Netherlands. You also see that large companies have started to use recycled materials on a large scale. The ship is slowly moving in the right direction. 10 to 15 years ago you still had to search very hard to find circular initiatives, now the situation is getting better. I foresee that this development will continue, also because of the war in Ukraine, the energy crisis and the COVID crisis. These crises have made us experience again what scarcity is. This has resulted in increased importance of linking different supply chains. Previously, large companies didn’t really know where they got their raw materials from: they didn’t look behind the suppliers. Currently, many companies want to gain insight into their entire supply chain and understand how they can control the impact of changes in this supply chain on their business operations. This means that supply chains are being redesigned. In addition, the customer side is now often critically examined as well. So I think this will also lead to more circular chains. This already happens at the top of the market, for example the expensive brands with great name recognition, or at family businesses and innovative startups. I expect this trend to continue.”

“At the same time, there are also challenges on an international scale. The energy transition requires a lot of material that is not there or difficult to acquire. We depend on countries in the Middle East for oil, for other things from Brazil and Russia, so international developments also play a huge role. The question is how this will play out in the future.” Maud adds: “Upcoming policies of the European Commission will also play a major role in stimulating a circular transition. For example, the extended producer responsibility, where the responsibility of the producer for the product is extended beyond the user phase, so the producers have to find ways to get their products back.”

Invest-NL is one of the supporters of the Circular Factory program. In this interview, Maud Hartstra and Guy de Sévaux discuss the importance of scaling up circular startups. “All kinds of developments are underway, which means that many more circular start-ups will be founded in the coming years. Circular Factory is designed for circular startups in the manufacturing industry that want to scale their production by building their first factory; and help them to make this factory circular. In addition to these startups, we also see on a larger scale a new focus of moving production closer to home.“

Circular Factory is a program of Tekkoo, BlueCity, Renewi, Stichting Ondernemersbelangen Rotterdam, Municipality of Rotterdam and Invest-NL.

Text: Evelien van der Kooi, Photography: Sophie de Vos