In a report launched today (12 May) figures show up to £1.3 billion has been deployed into circular economy investments in 12 months.
Disclosed capital deployed has increased by 10% from £788 million in 2021 to £879 million in 2022, according to the report by accountancy and business advisory firm BDO LLP. Between 2020 and 2022, the report says that circular economy investments rose in value by £616 million.
BDO also says that venture capital investors accounted for 62% of 2022 UK circular economy deals with an average disclosed cheque size of £4.9 million. While mid-market private equity investors made up 17% of 2022 UK circular economy deal volumes.
BDO’s research found industrials and manufacturing is the most prominent sector for circular economy investment for the second year in a row, accounting for 36% of deal volumes in 2022, followed by TMT (technology, media, and telecom) at 25% and retail, consumer and leisure at 21%.
The transition away from linear business models creates value while working towards sustainability goals.
In terms of themes, 26% of deals were businesses involved in circular inputs, 21% were circular designs and 16% were associated with material recovery.
Commenting on the report, Rory McPherson, corporate finance partner, said: “The transition away from linear business models creates value while working towards sustainability goals.
“As ESG continues to move up the agenda, circular economy businesses are extremely attractive to investors and BDO is ideally placed to advise the ambitious entrepreneurs and pioneering PE-backed businesses in the sector.”
