Alignment of private equity with circular enterprises not a given

Entrepreneurs, after the startup and scaleup phases, often rely on private equity, debt financiers, or an acquisition through M&A advisors. However, the characteristics of companies with a circular business model do not always align well with the practices of these parties, while the entrepreneurs are insufficiently prepared for this financing phase. According to research conducted by Route Circulair on behalf of Invest-NL, financiers, policymakers, and companies with a circular business model must collaborate to make follow-on investment and financing possible. The report, titled "Closing Loops, Opening Opportunities," provides an extensive analysis of the current state of circular economy investments and identifies critical factors influencing the financeability of sustainable and innovative enterprises.

The report, titled "Closing Loops, Opening Opportunities," offers an extensive analysis of the current state of circular economy investments and identifies critical factors affecting the financeability of sustainable and innovative enterprises. The study, based in part on interviews with leading financial professionals, highlights both the opportunities and challenges faced by investors and financiers in promoting circular practices within their portfolios.

Jeroen Derkx, senior business development manager Circular Economy at Invest-NL, emphasized the importance of the report: "This research is a significant step forward in our understanding of how to finance, stimulate, and accelerate the circular economy in the Netherlands. By mapping the ambitions and potential of the private equity sector, we can develop targeted interventions that speed up the transition to a more sustainable future."

Key findings from the report indicate a growing interest from private equity, debt funds, and merger and acquisition advisory firms in circular and sustainable assets. The report underscores the need for further research and collaboration among financial stakeholders to enhance the financeability of circular initiatives.

Looking to the future, the report highlights the role that Invest-NL can play by building expertise and collaborating with financiers, policymakers, and entrepreneurs. In doing so, Invest-NL can accelerate the transition to a circular economy and support entrepreneurs in increasing their financeability.