Circular Economy Startup Landscape 2026
Which areas of circular economy are attracting the most startup activity in Europe, and which ones are being left behind?
Leonhard Teichert, Program Lead at Circular Republic, presents the findings of the Circular Economy Startup Landscape 2026. Bruno Rudnik, Managing Partner at SEF Ventures and host of the startup area at IFAT, adds the investor’s view on financing and scaling hardware startups in this space.
What you’ll hear in this episode:
- Where European circular startup activity is concentrated and where the map is almost empty: the sectors that are overcrowded and the ones nobody is building in yet.
- What drives corporate adoption of new technology.
- What founders building hardware-based circular solutions should know: when to talk to an investor, capital structure, customer sequencing, and how corporates actually make adoption decisions.
This is the third episode in the IFAT Special series, recorded live at the IFAT Munich 2026
Video Impression
People
Bruno Rudnik, Managing Partner, SEF Ventures
https://www.linkedin.com/in/brunorudnik/
Leonhard Teichert, Programme Lead, Circular Republic
https://www.linkedin.com/in/leonhard-teichert-436a2b16a/
Patrick Hypscher, Circular Business Strategist, PaaS Expert
https://www.linkedin.com/in/hypscher/
About
IFAT is the world’s leading trade fair network for environmental technologies. It focuses on water, wastewater, waste, recycling and circularity, bringing together companies, innovators and industry professionals to present solutions for resource efficiency and sustainable infrastructure.
IFAT Munich is the flagship event of that network and the most important meeting place for the sector. It takes place every two years in Munich and showcases technologies and services for water, wastewater, waste and raw materials management, with the 2026 edition featuring around 3,400 exhibitors from about 60 countries.
Further Links
Find the study here: https://bdi.eu/de/specials/industry-spotlight-circular-economy-studie
IFAT: https://ifat.de/en/
Circular Republic: https://www.circular-republic.org
UnternehmerTUM: https://www.unternehmertum.de
SEF Ventures: https://sef.ventures/
Transcript
Leonhard Teichert: We see that after the peak in 2001, with startup investments, there was– there’s a decline in general startup, and VC funding. But for circular economy, that decline never happened, right? It’s still increasing, and it’s now at an all-time high
Patrick Hypscher: My name is Patrick Hypscher, and this is Circularity FM, the podcast about understanding, building, and managing circular business models
Here we are again at IFAT, the world’s leading trade fair for environmental technologies. In the previous episode, we looked at the macroeconomic potential of circular economy. Today, we zoom in on startups. Circular Republic launched its new circular startup landscape, and we will talk to the authors and figures behind this report.
The first conversation is with Leonhard Teichert, program lead at Circular Republic, and he will talk us through the key insights of the report. Afterwards, we talk to Bruno Rudnik, managing partner of SEF Ventures and one of the main contributors to the report. The report is full of information for companies looking to cooperate with startups, for investors identifying crucial fields of investments, and for startups who are looking for the next big challenge to solve.
Therefore, we will also add the link to the report to the show notes. Let’s start with Leo
Our guest today is Leonhard Teichert, Program Lead at Circular Republic. He just published the Circular Economy Startup Landscape 2026. Leonhard, what is the startup landscape?
Leonhard Teichert: Hi, Patrick. Uh, Thank you so much for the invitation. Well the startup landscape or the circular economy startup landscape is our attempt to track s- startup activities in the circular economy area in Europe.
Where are gaps? Where is innovation happening right now? Where is the money flowing? It’s important for our work to understand what’s happening on the ground and so we use that as a tool, basically. So to us, it is really a tool to snig- to signal what is going on but also to keep an, keep a close eye on the developments that are relevant for our work.
Patrick Hypscher: Okay. And how does it help you in daily business with stakeholders? Circular Republic is an enabler and ecosystem driver, and you’re in contact with many different stakeholders. How does it help you there?
Leonhard Teichert: It’s a tool that helps us to connect the corporates that we’re working with together with the startups that drive specific innovation that is currently lacking in the corporate space. And that is one of our basic USPs, right? We bring together the innovation space with the established corporate space to bridge these, gaps and close material loops in the real world.
Patrick Hypscher: And what are you seeing? So where do we have more than enough startups?
Leonhard Teichert: I think specifically when it comes to circular inputs, meaning bio-based or biodegradable inputs, we have a, very large number of startups in Europe that is substitutes for carbon-based materials, substitutes for fossil-based materials substitutes for plastics.
That’s where really a lot of startups have been founded in the past a- and that’s a space that probably will need to consolidate. Not all of these startups will scale, not all of these startups can scale. Probably we need a standardization at some point also in this space, but it’s great to see that so many people are thinking about regenerative solutions at this point.
Patrick Hypscher: And when you say there are too many, is it like based on any market sizing or is it just like the sheer amount of startups?
Leonhard Teichert: It’s the proportion compared to startups in other parts of the value cycle, right? If you look at the value cycle and see how startups are distributed along the circular, value chain or value creation then there is too many start– too many in quotation marks, right?
Startups in the bio-based inputs space and too little when it comes to critical raw materials, for example. And in order to Bring circular economy to an, industrial level, we would need to bring it to the European industry, and that probably will not work alone with plastic substitutes.
Patrick Hypscher: Okay. Yeah, clear. you already mentioned, critical raw materials, so can you give us an overview of where do we lack startup innovation in Europe?
Leonhard Teichert: So as I, just teased that we are lacking innovation in critical raw materials and in general in the end-of-life aspects of the circular economy when it comes to closing material loops, when it comes to dismantling end-of-life products, when it comes to automatically refurbishing or refurbishing them in an automated, manner.
So everything that has to do with the last quarter of the value cycle, basically becau- before we enter a new life cycle again, is underrepresented to some extent. And that is specifically so in the critical raw material space. We, however, see that specifically the startups in that space, are top-notch, right?
We have a couple of startups in that space that are really, at the forefront of what they’re doing worldwide. but they’re too little at this point, right? If it comes to magnets, for example, if it comes to heavy and light rare earth elements, these areas are very underrepresented at this point.
Patrick Hypscher: Okay. And I was in- I was initially thinking once we have everything, bio-based, then we don’t need so much the downstream, solutions. But, I guess it will take some time to have a bio-based magnet.
Leonhard Teichert: I, I absolutely agree with you. That should be the vision, right?
We should never drive away from that vision that at some point we have a bio-bioeconomy, basically. But to be realistic, that, that will take a while, and also the respective transition technologies, clean energy, they require tons and tons of critical raw materials, and we need to think about a way to keep them in productive loops as well.
Patrick Hypscher: Yeah. Okay. Gotcha. So now you named a few gaps. what does it take to close these gaps and bring more startup founders to that field and also scale up their solutions?
Leonhard Teichert: That’s a really good question, right I don’t have the full answer to that. But one interesting observation is that, And that’s also the reason why there are so many startups in the bio-base, based space.
People see some problems more likely than other problems, right? People saw that there is a packaging issue and that there is a plastics issue, and that’s why so many smart people decided to do something about that. There are so many industry-related issues that are just hidden somewhere and that only people that are really deep into that industry recognize and see the problem.
And so I think what we really have is a problem founder match, algorithm, so to say. So there is a specific problem in a specific industry, and there is a smart person that can actually solve the problem, because we have the smart people in Europe, right? We have the engineers and the specialists.
They just need to get to the problems. And I think communication also from a corporate perspective is key in that regard. But I think that’s one of the key elements. And then the other the other aspect is that, of course, most of these innovations are hardware-based, and there is still a certain hesitation specifically when it comes to early-stage investments in hardware in general.
It’s just more difficult to scale, more likely to fail and in general, more risky for for investors compared to, let’s say, the next dating platform.
Patrick Hypscher: I will ask Bruno about that in a second, yeah. About the hardware, not the dating platform, yeah, but let’s transition to that topic already, and look at the capital side.
You also looked at funding in circular economy startups. So how did that develop, over the course of your reports?
Leonhard Teichert: So we started doing these reports in ’23 and back then c-circular economy started to develop some dynamics, some positive dynamic. And since then we observed something quite remarkable.
If at least looking at Europe the share of circular economy investments continuously grew over the last four reports and years. Of course, our method of measuring that changed a bit, but the general trend, so let’s not talk in absolute numbers, but the general trend is a very positive one, and specifically compared to the overall startup investment trend, right?
We see that after the peak in 2001, with startups investments, there was– there’s a decline in general startup, and VC, funding. But for circular economy, that decline never happened, right? It’s still increasing and it is now at an all-time high. So that’s great news for the space and the community.
Patrick Hypscher: Cool. Wonderful. Leo we will add the link to the Circular Economy Startup Landscape 2026 to the show notes. And I guess everyone who wants to have the detailed breakdown, and you missed and still wanna be part of the map, they can reach out to you, right?
Leonhard Teichert: Definitely. And we’re also gonna publish a written report accessible for everybody.
Patrick Hypscher: Wonderful. Leo, thanks for your work and providing some insights.
Leonhard Teichert: Thank you so much for having me. It was fun
Patrick Hypscher: So I’m here with Bruno Rudnik managing partner of SEF Ventures, and basically host of, the startup area, so we’re basically in your r- living room here, Bruno. Welcome!
Bruno Rudnik: Living room, almost sleeping room, right? Yeah,
Patrick Hypscher: indeed.
Bruno Rudnik: Yeah, after day four now. Yeah.
Patrick Hypscher: Bruno, you, work intensively with startups at IFAT, but also before and after IFAT, you invest in startups, in circular economy startups.
How does it feel?
Bruno Rudnik: first and foremost, thanks, Patrick for having me, for the opportunity to talk here, at IFAT, as you said in my living room for a week, at least, or four days. Yeah, how does it feel? of course, a lot of excitement. Yeah, we really believe we invest in the future of the economy, of the circular economy- and breakthrough innovations. But then again, it’s all about turning breakthrough innovations into actual solutions, and I think this also not only reflects the spirits of investing into circular economy, but also why we are doing this here at IFAT with the startup area in terms of really, matching startups, their innovations with partners and other network players to really, yeah, provide money.
Yeah. But this is only part of the fun. I think really, creating the networks that are necessary- to grow these innovations into solutions as I said, which is really, the full part, huh, of the story and then the real fun.
Patrick Hypscher: Yeah, and then, it’s super important, yeah, as is, as you said, to bring the startups together with future customers, with investors.
I just talked to Leo about the key findings- Yeah … of the Startup Landscape 2026. and there’s of course also the venture, perspective in, and you- Yeah … you know the startup perspective- Yeah … you know the circular economy, perspective, and the venture capital perspective. and there is al- almost always the struggle for h- hardware-based startups.
And in circular economy there are many startups are hardware-based.
Bruno Rudnik: Yep.
Patrick Hypscher: The struggle for hardware-based, startups to get capital- why is that?
Bruno Rudnik: Financing,
Patrick Hypscher: yeah.
Bruno Rudnik: Yeah. Yeah, there’s a number of reasons, right? So of course, traditionally, when you look at, I think, venture capital and in Germany and Europe, it used to invest a lot into more asset-lighter solutions- software, B2C, et cetera. So I would say yes. those technologies that scale faster, right? so that’s probably a bit of the- tradition of VC and financing in Europe. But I think also the comfort zone of these investors- also the knowledge that is required to invest into circular economy, in particular hardware- a startup that is required, support them while operationally with the scaling, and I’m talking about technical scaling from lab, pilot, demo, first commercial. Also commercial scaling in terms of go to market, understanding the business models, the markets, the partnerships that are necessary, and this requires really like a special skill set, I would say- also from a VC investor. And this is something where we as EF also have identified a bit of a market gap or an opportunity for us to come in with a different type of skill set. Because we see that startups are struggling, that co-investors are struggling to find lead investors for circular economy hardware startups, and this is where we see a good opportunity to come in with a specific skill set of really actively not only investing money, but supporting the startups on their scaling pathway.
Patrick Hypscher: Okay.
Bruno Rudnik: So, yes, it’s harder of course, but still, I believe it’s a good opportunity. I also believe there is sufficient opportunity- in terms of number of startups. You mentioned, talking to Leo, they were presenting the circular economy startup landscape. So there is good deal flow, there are opportunities.
There is a big problem that we are addressing. So after the problem, there’s a market, hopefully. If there’s a market, companies are being built. If companies are being built, they’re looking for venture capital or for capital. It’s not only venture capital. and we just have to make sure that- the market framework and the conditions are right.
The right set of financing, regulatory framework with a certain reliability over time. So I think, yes, there is an opportunity. Not an easy one, but we are happy to tackle it.
Patrick Hypscher: Yeah. Wonderful. And, Leo pointed out, that there are especially a few areas or a few opportunity fields- Yeah … where there’s still untapped potential.
and combining that with what you just said about, the skill set it needs to invest in hardware-based startups, let’s flip that a bit and, if I am, I’m also a founder, applying for funding- Yeah … and looking for the ideal partner, what are, like, two, three essential- aspects I should take care of, especially in comparison to, let’s say, software- Yeah
software-based, funding model. Yeah. What’s essential- Yeah … that I have prepared- Yeah … before talking to investor like you?
Bruno Rudnik: Yeah. Well, maybe number one, it’s never too early to talk to us- Mm-hmm … or to a VC investor because it’s really like a, it’s, it’s a journey. Mm. It’s a fundraising journey. It’s a company buildup journey. Mm-hmm. And I think as a founder, n- no matter, you know, if you think about the go to market, the business model, the technical scale up, but also for the financing, from day zero I, I would say, or- Mm-hmm
zero plus one, try to map out, try to figure out how your financing journey could look like. Right. So it’s not all about venture capital. I mean, we as a venture capital fund, we are just a small part of the game. Yeah. And it’s really important, let me call that, to think about something like a, like a layered capital structure.
Mm-hmm. Which, again, has various aspects. What do I m- do I mean with that? So different types of capital for different stages.
Patrick Hypscher: Mm-hmm.
Bruno Rudnik: Um, venture capital, strategic capital, public capital and private capital, um, to start with. But then also, for example, try to finance with your venture money maybe more the tech side of the company.
Yeah. Yeah. And try to manage the tech risk. Whereas when you need asset financing- Yeah … or when you have asset financing, which you almost always have in, well, circular economy hardware at least, try to find other, um, financing solutions for that. Grants, um, strategic investors. Yeah. That is an interesting, partially controversial aspect, when to get in strategic investors.
Yeah. Flip side or downside maybe being if you take them too early, you might block like the, the exit pathway, talking about the financial journey. Yeah. You might block something on the market when you talk about the sales side of things. But then again, I think it’s not so much about yes or no, or if you take a strategic investor, but rather how you take them.
Mm-hmm. No? But I’m quite convinced that whether it’s related to material science, chemicals, recycling, I mean, look at IFAT, the players that are here, they play an important role in the layered capital structure I was, I wa- I was, I wa- I was talking about. But again, think about this from the beginning. Right.
That was your question. Yeah. Have the journey, the, the financing journey nicely mapped out from the beginning.
Patrick Hypscher: Okay. Cool, and, just a side remark for everyone listening right now, last year we did, a whole series on venture capital and circularity, so nine interviews with VC funds, also hardware-based.
Cool … everyone who’s, yeah, wants to dive deeper into that-
Bruno Rudnik: Yeah, great … you can go there. No, super helpful work that you’re doing- … on that one, because it’s really a journey, yeah? A financial journey, financing journey, technical upscaling, and all at the same time.
Patrick Hypscher: Yeah, yeah. And, last question, Bruno.
Sure. let’s not forget about the customers, yeah? in the end it’s about solving customer problems. Yep. I sometimes feel there, that when I look into the LinkedIn posts, the newspaper- everyone wants to have this transformational technology, yeah? Sure. Yeah. a- and at the same time- when it comes to talking to customers, customers don’t wanna change that much, yeah? everyone is looking for drop-in solutions- Yeah … and stuff that fits in, existing processes. So how to balance that? When do you rather say, “Okay, I don’t wanna change too much of the process,” Yeah
but then maybe also the, impact might be limited? Yeah. Or, is this a w- wrong tension I’m making up here?
Bruno Rudnik: I think it is. I think it is, Patrick. So the question is, there a transformation or can we have transformation without changing, right? Yeah. and I think the answer is no, you can’t have that.
So it’s more about the question, I think we agree that we need industrial transformation. Easy And then the question is, what kind of change does this kind of trigger? And I really think, yes, we are industrial players, value chains have to change. And I also am convinced that it’s not necessarily about avoiding change, but ra- in industry in particular, but rather about how to manage organizational change.
And I would say, corporates rarely adopt a new technology. But what they adopt is, how can I call it? That they adopt reduced risk maybe.
And now, another question is how do you achieve that? Yeah. what can you do as, a hardware startup to reduce risk in this adoption process?
several things. You know having a nicely step-by-step defined scaling model, know how to scale from lab to pilot, demo, yeah, how many iterations. A modular technology approach. Find the first movers on customer side, maybe not the big names- Yeah … but maybe a smaller one- a privately owned, company where the owner has a different set of incentives maybe to, move first, create some nice references, right?
So that the larger ones can, follow. Many aspects to that, how, to- reduce risk in this adaption journey. And then maybe, another point in terms of how to, yeah, manage this organizational change. of course, we all want to promise the better future- Yeah … with what we are doing, sure.
But I think at the end it’s rather for a corporate about solving a painful solution- Yeah … that they have. True. And again, that could have many aspects, right? It could be a cost pressure a insec- unsecure insecurity in, a supply chain. Yeah. Even regular things are pressure, right? And we are here in the environmental technology sector, so if you really can, here manage the organizational change in terms of then really solving pain points that they have- Yeah
I think that is really, helpful. And then the impact at the end hopefully will, come- Yeah … in the longer term. Yeah. Not by itself, but based on the, solving a pain point.
Patrick Hypscher: Yeah. Bruno, wonderful. thanks for sharing these really specific insights and inviting all of us to your living room here at IFAT.
Bruno Rudnik: Yeah. Yeah. I think, let’s see. if I stay longer, I don’t think so. Yeah, last day today, but we’ll be back. Yeah. So this has been eight years of startup area, and in two years, Munich, IFAT, 2028 will be 10 years of startup journey. So yeah, thanks, Patrick, for having me and for being around and really, supporting, the ecosystem.
Very helpful what you’re doing.
Patrick Hypscher: Yeah. Thank you.
Bruno Rudnik: Cool, thanks. Yeah.
Patrick Hypscher: This was the third episode in our IFAT special. We started this series with a view on sovereignty, continued with the economic potential of circularity, and in this episode, looked at the startup landscape in Europe. The next episode will bring all of this together, and we will share and present to you the winners from the Circular Technology Award by Knorr-Bremse, with a focus on critical raw materials and automated disassembly.
Stay tuned, and please make sure that we drive a profitable circular economy. And don’t forget, the most abundant renewable resource is your imagination.
Patrick Hypscher: My name is Patrick Hypscher, and this is Circularity FM, the podcast about understanding, building, and managing circular business models