Innovations in software, data analytics, and robotics for the waste and recycling industry have benefitted from $668 million of funding since 2011, according to a new report from Lux Research.
The Boston, US based strategic intelligence firm said that material recycling innovations received the most funding among ‘circular economy’ technologies, which it defined as being “innovations that reduce waste or convert waste into valuable new products”.
Of the total funding of $668 million invested from 2011 through the first quarter of 2016, material recycling was said to have captured a 69% share and accounted for 65% of the total 155 deals. Waste to energy was claimed to have recieved 16% of the funding.
"Waste collection and sorting are experiencing disruptive changes due to the innovations based on software, data analytics, and robotics," commented Jerrold Wang, Lux Research analyst and lead author of the report, Observing Trends from VC Investment Activities to Material Recycling Fields.
"The sorting segment has a hotspot in robotic-based technologies, and may integrate into collection or processing segments in the future," he added.
The researchers explained that used Pitchbook data from 2011 to the first quarter of 2016 to evaluate funding for circular economy related innovations.
The key findings were:
- The US matched Europe in the amount of investment but saw more deals - $310 million in funding for 84 deals, compared to $308 million for 52 deals in Europe. Among individual countries, the UK led Europe with 11 deals worth over $10 million
- Within the material recycling segment waste processing topped funding with a 48% share and number of deals with a 42% share. Waste collection came second in both, with an identical 36% share in both funds and deals. Waste processing was dominated by material-specific technologies, while waste collection had switched from these technologies to software and data analytics
- In terms of funding stage, waste collection got more late stage deals, many related to IT innovations. Seed-stage investment in waste processing covered a wide range of materials, while later stage deals focused on commonly recycled materials.
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