Circular Economy Series

21 July 2022

The EU introduced its vision for the circular economy in 2014, kick-starting the transition away from traditional linear economies. Eight years on, and the circular economy is no longer simply a concept, but a vital consideration for businesses, no matter the sector. The concept of the circular economy continues to gather momentum as it becomes increasingly acknowledged as an essential part of the solution in tackling the climate crisis.

The opportunities created by transitioning to a circular economy are not just limited to the natural resources; it also creates a unique opportunity for entrepreneurs and investors to collaborate and develop circular business models which combine economic value creation and sustainable future.

The BDO Circular Economy Series looks at how the UK M&A market is driving the circular economy and its transformational use in eliminating waste and pollution, circulating products and materials, and the regeneration of nature.


In the latest publication in our BDO Circular Economy Series, Investment into the UK circular economy, we consider the changing attitude of private equity, venture capital investors and debt funders towards Circular Economy businesses.

Annual investment in UK Circular Economy businesses has tripled in volume from 42 deals in 2018 to 119 in 2021 with over £1bn of capital deployed in SMEs by private investors. We take a look at:

  • Who is investing in the UK Circular Economy?
  • What is driving increased investment activity?
  • Which sectors are being influenced by circular economy trends?
  • What can an investor offer your business in return?



  • 296 investments in circular businesses and over £1.5bn capital deployed across both equity and debt.
  • Annual deal volumes grew from 42 in 2018 to 119 in 2021 at a CAGR of 41%.
  • Venture capital accounted for 50% of 2021 transactions, supported by mid-market private equity (22%) and debt funding (15%).
  • Industrials and Manufacturing is the most prominent sector for Circular Economy investment, accounting for 37% of deal volumes in 2021
  • 26% of 2021 investments were made into technology-led businesses

In this publication, we look at M&A activity in the Waste Management and Recycling sector and consider how circular waste management is growing in the industry.

Recycling is a central component of the UK Government’s environmental strategy and good quality recycling assets have always attracted interest. It’s clear that trade buyers and investors continue to view recycling as a cornerstone of sustainability, accounting for 44% of UK Waste Management and Recycling sector deals in 2021. Businesses delivering recycling services are generating 8.0x EBITDA multiples on average, indicating that there is significant value on offer. With record levels of investor capital ready for deployment, and ESG considerations now critical, private equity investors are better placed than ever to compete with corporates for high quality sector assets.

Download the Circular Economy Waste Management and Recycling Report Now

Find out:

  • How sector acquisitions involving target businesses that reduce or eliminate waste through cyclical design have been growing
  • Why recycling assets remain attractive acquisition opportunities
  • What consistently high levels of M&A activity in the sector means for the growth of the circular economy in the UK

A circular economy business model moves away from traditional linear business models, where raw materials are used to produce products that have a finite lifetime, before being disposed of without consideration for environmental impacts. In a circular economy, materials, products and energy are reused, repaired, recycled, shared and composted to return natural resources to the earth, and prolong the lifetimes of technological resources.

‘A circular economy decouples economic activity from the consumption of finite resources. It is a resilient system that is good for business, people and the environment. The circular economy is a systems solution framework that tackles global challenges like climate change, biodiversity loss, waste, and pollution.’ – Ellen MacArthur Foundation

A move to a circular economy would hold many benefits for the environment, and the climate crisis. It aims to eliminate waste, with biological materials being reused until they can be composted or used as fuel, and prolonging the lifecycle of finite materials like metals by focusing on reusing, refurbishing and replacing parts. In turn, by aiming to return natural resources to the earth, it aims to regenerate nature, with the economy operating on a principle of reusing resources many times over. This reduces the reliance on finite resources and allows the economy to actively regenerate the natural environment.

Get in touch with our team

BDO Corporate Finance is experienced in the mid-market, advising entrepreneurs, private equity and public companies who are buying or selling a business, seeking investment and raising debt funding.

If you’d like to discuss the publication in more detail or gain more of an understanding as to how BDO can help your business, please get in touch with one of our Circular Economy sector leads Rory McPherson or Todd Mills.