Circular.co is a tech platform that built the world’s largest post-consumer recycled (PCR) materials database for brands to navigate markets and make data-driven decisions. Pulse 2.0 interviewed Circular.co founder and CEO Ian Arthurs to learn more.
Ian Arthurs’ Background
What is Ian Arthurs’ background? Arthurs said:
“I am originally from the UK, and went to business school in the US. I spent the last 20 years in tech, in executive roles at Google, Airbnb, TaskRabbit, and Medium. I’ve been primarily an operator and have worn many hats, but mostly as a COO, where I take growth ideas and make them scale. With all that experience, the time was right for me to start my own company, together with some great investors.”
Formation Of The Company
How did the idea for the company come together? Arthurs shared:
“IKEA acquired TaskRabbit in 2017 following a successful partnership, which was a formative experience in many ways. We expanded globally and built on incredible investment. It was also the first time I really got to see the inner workings of a company that made physical things on a global scale. IKEA, like most major manufacturers today, has lofty sustainability goals and struggles to hit them. It turns out most of the issues blocking progress are market-related. Meaning, the markets for sustainable solutions, like recycled plastic, are relatively new, fragmented, analog, and opaque. It’s genuinely hard to navigate them and invest when it feels like the Wild West. When I saw these issues firsthand, the light bulb went on…we’ve solved market liquidity and transparency issues before many times in companies I have had the good fortune to help lead.”
“Clearly, I was not a sustainability or manufacturing expert, however, so I partnered with smart investors such as Eclipse Ventures. After a deep investigation into the sustainability, recycling, and manufacturing spaces, we found our niche and created and funded the concept for Circular.co.”
Favorite Memory
What has been your favorite memory working for the company so far? Arthurs reflected:
“I love seeing concepts become software that provides clear value and solves real-world problems. A year or so ago, we worked with some large global brands as pilot customers. We used our initial database and software to source new suppliers of industrial-scale recycled plastic resin at a price below the virgin (oil-based) competition, and all at ‘internet speed.’ When we saw the reaction and genuine (pleasant) surprise, that was when we said, oh wow, we have something special here!”
Core Products
What are the company’s core products and features? Arthurs explained:
“Our mission is to transition the world’s manufacturers to sustainable materials. We started with Post Consumer Recycled (PCR) Plastic markets as that’s the most urgent need and one of the most illiquid markets. With that, we understand all the reasons manufacturers struggle to hit their PCR goals and comply with EPR legislation. So, we created a platform that addresses their major pain points. Namely:
Exploring market data to find out if the material you need is available, where, and at what price, and effectively plan your PCR portfolio
Searching for vetted, relevant suppliers and getting custom quotes to specific product specs in days
Sourcing and procuring the materials directly with suppliers and managing all the testing, compliance, and logistics that go with this
Managing your supply chain with added-value features like carbon accounting and freight
The platform is “full stack” and allows a manufacturer to develop a data-driven strategy, find vetted quality supply, transact, and efficiently manage the procurement process with simple, easy-to-use internet tools. The same is true for suppliers, where we provide them with tools to find buyers more easily. What’s also cool is the model applies to all sustainable materials markets where demand struggles to find supply or vice versa. We are expanding to adjacent markets in the very near future, as customers demand it.”
Challenges Faced
What challenges have Arthurs and the team faced in building the company? Arthurs acknowledged:
“Building a company from scratch means you deal with all kinds of challenges. The Silicon Valley model of “Launch and Iterate” means that you effectively build a minimum viable product to solve a discreet problem and then learn what works/doesn’t and iterate it until you find a real product/market fit. Our biggest challenge came after we launched our first beta product two years ago which was a simple marketplace to connect buyer to seller. That product created a few small transactions but didn’t really take off. It failed.”
“But the challenge became the opportunity, as that failed initial product launch allowed us to learn why it didn’t work: To really transact at an industrial scale, buyers needed much more detailed nuanced data to make product and procurement strategy decisions. Buyers didn’t have easy clear access to data to make smart decisions. Since then, and with the advent of AI, we have created a database of about 10,000 suppliers and 50,000 technical records. That powers a suite of software tools that address multiple points of friction throughout the sustainable sourcing process. That eventually led to market traction and more investment, and the insight that we can expand to adjacent categories easily. We couldn’t have found that out if we didn’t create that first failure. ‘The obstacle is the way’ is one of my favorite sayings (and books, by the way).”
Customer Success Stories
After asking Arthurs about customer success stories, he highlighted:
“We work with multiple large global brands in the CPG, auto, electronics, and durable goods sectors. This includes many companies that have clear sustainability goals, especially with respect to plastic. We are all under NDA and the products that are sourced are private company information, so I won’t share names. One company we’ve been partnering with for a while is a global food brand everyone sees in supermarket dairy and drinks aisles. They’re committed to reducing the use of virgin plastic in their packaging by ⅓ by 2025.”
“Although they’ve already made strides towards reaching this goal, they’re actively looking for ways to reduce costs and drive efficiency in their PCR procurement processes. With their need for significant volumes of food-grade PCR and their openness to new streamlined processes, we successfully used our data and software to explore new markets and search for new vetted suppliers, digitally. This is similar to other companies we served: in Q4 of last year, we sourced over 35 thousand metric tons at a market value of over $43M, all in software in a fraction of the time it takes to do in incumbent analog methods. 90% of our most recent customers find savings opportunities compared to their internal benchmarks, too.”
Funding
When asking Arthurs about the company’s funding details, he revealed:
“We just announced a new $5.3M round, backed by Maniv, Oxygea, and Eclipse as a fast follow from our previous $5.2M seed round, led by Eclipse, combining to $10.5M. The funding will allow us to grow our team, expand to new types of sustainable materials, enlarge our supplier and buyer pool, and deepen the platform’s offerings.”
Total Addressable Market
What total addressable market (TAM) size is the company pursuing? Arthurs assessed:
“The global plastics market is greater than $600 billion and the recycled plastics is between $60 billion and $120 billion depending on who’s doing the calculations. We see a significant shift from virgin to recycled over the next decade as EPR laws and consumers demand sustainable plastics.”
“When we consider adjacent sustainable raw materials markets, from metals to glass, the TAM climbs well into the Trillions.”
“The carbon markets are also at play here as virgin raw materials typically have a large footprint; plastic’s carbon footprint alone is around 2Gt. Replacing virgin plastic with recycled plastic drastically cuts that footprint, so there is significant demand from a CO2e perspective, too.”
Differentiation From The Competition
What differentiates Circular from its competition? Arthurs affirmed:
“Data and perspective. We created the world’s largest PCR database with AI. That data powers our tools and gives access to markets that cannot be replicated easily. We did that because we looked at the industry’s challenges from an outside perspective, applying technology from other industries to reduce friction and increase liquidity.”
Future Company Goals
What are some of the company’s future company goals? Arthurs concluded:
“Our goal is to continue growing. We will expand our customer base, our buyer and seller database, expand internationally, and add additional sustainable materials, including paper and metals to become an all-in-one transactional platform for buyers and suppliers.”
