Zooming in on the circular economy

demo day
Training hopefuls

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By Peter Hulm

For environmentalists, no modern slogan is more enticing than The Circular Economy. But how circular can it get under COVID-19? In Geneva last month, 27 budding entrepreneurs explained just how far the idea can go. They presented their teams' projects online, and 9 received prizes, voted as most promising by their virtual audience. In advance of World Environment Day (5 June), Peter Hulm checked them out. But you can also watch the five-hour pitching sessions and awards ceremony on YouTube (LINK).

logo

First, the circular economy is not just about recycling. Lynda Mansson, Director General of the Mava Foundation (LINK)(created by Swiss environmentalist and ornithologist Luc Hoffmann), made this clear in her opening address broadcast via Zoom as a major supporter of Switzerland's Circular Economy Incubator.

"We go way way beyond recycling," she emphasized. "For example, rethinking the design of products, so that all the components can be disaggregated and reused in some way."

And in its broader aims, the Circular Economy movement can take on climate change, resource dependency and even encouragement for local employment. In short, it pushes for "a much more rational use of resources, which of course reduces the pressure on biodiversity and nature in general" (always one of Luc Hoffmann's concerns).

Seeking a centre for innovation with convening power

But why the emphasis on Switzerland? Ten years ago, after working in other parts of Europe, Africa and China, when the foundation looked at this country, "we felt the circular economy was not yet on the agenda in Switzerland" (LINK)

This brought the foundation to ImpactHub Switzerland, co-organizer of the Incubator programme, "as a centre for innovation with convening power".

"We wanted a partner that was young and dynamic and reaching out to people who were not perhaps within our normal network," she added. "The Incubator is really important to bring to the fore that you can run a business that is circular and can thrive. We need ideas that can be scaled, much greater engagement than we have seen before."

But Switzerland still has a way to go before it has the regulatory framework in place to enable a Circular Economy, as one of the prizewinners told viewers. "We need great examples to show how it can be done...combining heads in the clouds with feet on the ground," said Lynda Mansson.

pitchers
The pitchers on Zoom

How far the message has gone remains in doubt. Two weeks after the 18 May show, the YouTube video still had only 200 viewers.

The Programme selected 27 start-up projects from 100 applicants and then gave them each three months' training in various parts of Switzerland with peer-to-peer learning and support from business experts.

500 startups in two years

For the major prizewinners in the four sections of the Circular Economy Transition marathon there was CHF2,500 (shared by two in one section) while the runner ups received a 3-month membership of ImpactHub Switzerland, enabling them to share working spaces and facilities around the country as well as access to the experience-sharing network.

José Filipe Silva, National Coordinator of the National Circular Economy Incubator, remarks: "Since we launched the Circular Economy Transition 2 years ago we have had the opportunity to collaborate with more than 500 startups and players of the Swiss entrepreneurial system. That gives us a lot of hope about what the future will look like. Entrepreneurs definitely play a key role in shifting Switzerland towards a circular economy.

"But they will not make it working in silos, of course. We believe that now, as we are reshaping a post-COVID-19 economy, it is the right moment to collaborate even more in order to improve our regulatory policies and invest in business models that will make our economy thrive while having a positive impact for the people and the planet."

Winners

exnaton
A project hat has already changed Swiss law

 

The winners for food and farming services were Lyfa (Basel) and HopVrac (Neuchâtel), sharing the prize, with WePot of Prilly runner up. Exnaton from north-eastern Switzerland, with its first customer since February (Walenstadt Electricity) won the smart cities and industry award, with I.C.E. Materials in French-speaking Switzerland as runner-up. I.D. Watch in the Jura won the consumer goods award for producing timepieces using 98% recycled steel, while a clothing exchange in Berne was runner up. In the closing sharing and platform section CINE.EQUIPMENT in Zurich took the prize for its movie equipment rental project, while RemotelyGreen, responsible for part of the pitching broadcast, was voted runner-up.

The first online pitchers were for food and farming services. And as with most of the other teams, they were highly educated specialists, though often in other fields than their projects. Lyfa's online grocery concept, for instance, was started by two young men with a master's in engineering. RemotelyGreen's team includes physicists from CERN projects (the Geneva-based particle physics lab).

Networking key?

What was also striking was that many projects were extremely local, relying on individual commitment to the effort. They have a good chance of making it in their regional markets but don't need to grow nationally in order to succeed, no matter how much they could benefit from networking. Perhaps other entrepreneurs will borrow their ideas and create the networks that can bring the benefits of scale.

The prizewinners list

Here's what the prizewinners had tosay at the Virtual Demo Day (in a mixture of English, French and German):

Food and farming services

Lyfalyfa
(LINK) YouTube pitch at 44 min

Basel-based Lyfa's unique selling proposition is as a "online store and delivery service for packaging-free groceries" delivered by bicycle and using fresh, local products.

It opened in March 2020 and has secured 50 orders a month without marketing. "Over 65% of our current orders coming in are from repeat customers," reported co-founder Michael May.

Starting with one supplier, Lyfa now has eight with over 240 products. The order size has grown from CHF50 to over CHF80. They cover fruit and vegetables, eggs and dairy products, dry food, plus hygiene and cosmetic products.

"If we can hit 300 orders a month we already have the volume needed to make an operational profit," says Michael.

But that's not its circular-economy selling point. Lyfa (whose name recalls the Swiss-German word for delivery) pitches itself as "an online grocery store with exclusively reusable packaging or no packaging at all". The packaging is returned when your next order is delivered – "the way milk was delivered in the past" – and given back to suppliers to clean and reuse.

Why should consumers bother? Currently shopping can be inconvenient, time-consuming and shops can be in inaccessible places, Lyfa argues. Consumers "want to make a change but they also want something that will easily fit into their lifestyle. We are going to make it easy to shop waste free," argues Michael.

Competition is building up. Packaging-free stores have grown from four in 2015 to 20 in 2019. At the same time. Online grocery sales in Switzerland are growing by 13% a year. With outside financing, Lyfa's aim is to reach 1,000 orders a month over the next 18 months and is considering expansion to other main cities while continuing an academic partnership with the University of Applied Sciences in Basel. It also has "a strong advisory team" through the Circular Economy initiative.

HopVrac

HopVrac

(LINK) YouTube pitch at 1:00:18

HopVrac in Neuchâtel applies a different approach to online grocery orders: customers pick up their orders at local merchants, at the HopVrac centre or even partner workplaces. The two women founders are also going a different route for funding: crowdfunding at wemakit (LINK). As of 30 May they were 90% funded with CHF22K from over 200 backers pledged in 12 days. They go into full operation in autumn 2020 but have already found 50 suppliers.

Their business aims to provide and wash the containers for orders and give customers a discount on the next purchase. HopVrac estimates that with the average basket containing CHF50 of goods – fresh food such as eggs and fruit as well as dry products – it can charge a 30% gross margin and count on two orders from each person every month, with 70% return customers (as with Lyfa).

HopVrac's founders made a point of showing their gratitude to the CE Incubator for its help: "Thanks for the last couple of months. It has enabled us to grow a lot faster. We really appreciate that."

Expansion plans include bringing La Chaux-de-Fonds into the net, and in the third year spreading across French-speaking Switzerland, as well as exploring the market in the Ticino.

WePot
(LINK) YouTube pitch at 55min

Olla is an unglazed, porous clay pot with a short wide neck and wide belly used for centuries to cook stews and soups, store water or dry foods – or, in this project as traditionally, to keep plants watered when buried in the ground.

WePot is trying to commercialize the production, using the La Cordée workshop for the mentally handicapped at Prilly near Lausanne, and producing pots in various sizes, including one designed for indoor use (CHF25).

You plant the ceramic pots in the root zones of plants and pour water into the exposed necks of the pitcher. The water seeps naturally into the soil, providing a continuous supply of water to the plant, which fixes its roots around the pot.

Their major appeal: the slow-release system saves 50-70% of the water used to keep plants healthy because very little is lost to evaporation on the soil surface. WePot says you may need to water your plants only once a week instead of each day.

WePot is currently looking for partners to become sales points for its products.

Smart cities and industries

Exnaton
exnaton
(LINK) YouTube pitch at 1hr 50min

"We help providers turn energy into new revenue streams," says Exnaton. And these days that can be anyone.

With its digital apps, using "smart-meter technology", Exnaton "enables consumers to buy green energy from their neighbours' solar panels," explains CEO Liliane Ableitner, who has a Ph D. in information management.

As a result of Exnaton's pilot project, part of the founders' research work at the ETH Zurich and University of St Gallen, Swiss legislators moved to liberalize their energy market (dominated by multi-national investors) and permitting local energy markets.

"The energy sector is late to the digital revolution," observes Liliane.

Other tech startups have launched competitive products but "we are the domain experts in Switzerland," Liliane points out. It developed its "smart-meter" system in under a year and has been operating it for 12 months.

A World Economic Forum article by a German informatics professor suggested: "As energy production is decentralized and blockchain-enabled [i.e. secure and specific] decentralized electricity markets are developed, smarter meters will be essential. Just as consumers have become ‘media creators' in the smartphone era, they will become ‘smart market prosumers' in the future, using blockchain trading platforms."

Its website reports: ""We built the software of Switzerland's first local energy market and tested it in a pilot project. In January 2019, 37 households from Walenstadt (Switzerland) joined our local energy community. PV [photovoltaic]-owners sold their locally produced electricity to their neighbours in Walenstadt. A web application offered in-depth insights into their personal electricity data. The user response was overwhelming."

The experiment drew international media attention (LINK). A startup monitoring site noted that while the households were able to use their local solar supplies for a third of their needs, and the software proved very reliable, the hardware regularly failed and the hardware consumed 4% of the energy (LINK : German only).

Exnaton's revenue-earning model is to charge a recurring revenue fee per connected household.

Today, with a CHF100K public grant for development and another CHF20K grant for mentoring, Exnaton's recently signed a partnership agreement with a hardware provider for devices and is seeking CHF1m in a seed round of funding. Its goal is to secure three more customers over the next 18 months.

Meanwhile, its official address is still the ETH Entrepreneur Club in Zurich.

ICE Materials

ice

(LINK: more informative link at LinkedIn) YouTube pitch at 1hr 40min

Runner-up in the smart cities and industries section, this Swiss startup from a pharmaceutical engineer aims to offer a composite substitute for concrete in buildings. ICE (Innovative Circular Engineering), based in Montreux, says it can design aircraft, motor and sailing equipment but particularly buildings using material "with a unique combination of physical structure" guaranteed to divide your energy bill by four, be five times more insulating than concrete, seven times more resistant (perfect for a 10-storey building), 8 times lighter than wood – and 170x lighter than concrete.

At the same time, inventor Yves Morin notes that LafargeHolcim's CEO has said: "We need to find alternative solutions to concrete by 2025."

Yves estimates that using his prefabricated material, you can build a 200m2 house in two weeks instead of 9 months. He traces the material back to his work on a medical ingredient that proved too viscous to use but became a natural glue and led him to this breakthrough composite material.

He plans to register eight patents for his system this year and start producing houses from the beginning of next year. He foresees three ways to earn revenue: through products (walls, insulation, floors and ceilings), services and digital products using artificial intelligence.

ICE Materials, with a team of five and partners including Lausanne's EPFL (Federal Institute of Technology), is looking for CHF million to go forward.

Consumer goods

ID Watch

 

idwatch
(LINK) YouTube pitch at 3hr00min

Based in the Swiss Jura, ID Watch collects Swiss watch and medical waste and takes it to a local steelworks in the Savoie region of France to produce steel bars that are made 98% of recycled materials, which are then certified before they are used to make watches.

Even the watch straps are recycled: "vegan leather" derived from grape waste, or using Bananatex – a Zurich-based Swiss initiative using the waste from banana trees, Merino wool and other biodegradable materials.

ID Watch also offers customers a "circular service" – three digital circular coins that entitle you to a future discount of 50% on repair and replacements (of the watchface or bevel.

The startup plans to launch a limited first collection for the end of 2020, selling at around CHF1K, half the retail price. Its Kickstarter objective is to produce a minimum of 300 watches, with the maximum set at 1500.

TEIL

teil

(LINK) YouTube pitch at 2hr30

This "open source clothing store" in the Swiss capital Berne offers customers the chance to swap three clothing pieces from partnered Swiss fashion labels per month for CHF29.90 (the marketing device of knocking a couple of cents off any rounded figure is alive and well in Switzerland, it seems). It was runner-up in its section.

The store launched by seven young men and women opened in May and already has 70 people signed up. Teil in German means both piece and share.

Sharing and platform solutions

CINE.EQUIPMENT
(LINK in German only) YouTube pitch at 4hr15min

As of now this movie-equipment sharing project is just based in Berne. But co-founder Fabian Steiner estimates 10K film-makers in Switzerland don't have the equipment they need at a reasonable price, or are ready to rent material out to colleagues.

The site already has 100 film-makers offering their equipment for rent. The site includes information on Swiss federal funds for independents, a guide to insurance for equipment, as wellas an offer of daily insurance, and help with price calculations for filming. The equipment for rent includes studiosat various prices from CHF800 a day.

"It enables you to work with a small budget," Fabian points out. But its other attractions are that it ensures secure payments and offers checks on users.

RemotelyGreen

remotelygreen

(LINK) YouTube pitch at 3hr52min

"Online events are 2-5 times faster and 10x cheaper to organize and attend," RemotelyGreen points out. "More importantly from our point of view, they produce 96% less CO2," underlines CEO Ben Krikler, a PhD a particle physicist with a team of four others, including other CERN associated scientists.

But, he admits, Internet sessions have a major drawback. RemotelyGreen's survey of some 300 people found that the biggest downside is the limited inperson interaction. One conference organizer said: "80% of the reason my clients join my events is to meet other people."

RemotelyGreen is trying to change that step by step, starting with the inspiration of the coffee break but "make them even better than in person", says Ben.

The project offers to bring 2-4 people together remotely, either by matching people randomly or on the basis of their requests, "exactly like bumping into someone in the coffee queue", observes Ben. It also suggests talking points to make the connections more meaningful. And from conference participants can even find people who will challenge your ideas.

"Imagine a conference with a thousand people. The chances are tiny that you would meet the people you most need to. With our system we make this much more likely."

Pre-COVID 19 the videoconferencing market worth was $3bn in 2018 was estimated to grow by 9.8% a year until 2026. "In the last two months it has totally exploded," Ben reported.

In contrast to its competitors, in addition to video calls (as with Zoom or vFairs), RG will offer participant-created rooms and random networking (like Asirmeet), but also adds guided networking and an open-core software model to its services.

RemotelyGreen has already organized 10 events, internally and externally, including a networking event for a high-level panel of the United Nations "who have asked us to support further events", Ben said.

Its planned revenue streams include platform subscriptions, pay-per-events, consultancy for events and research grants. RemotelyGreen notes that it has close contacts in the academic and civil societies – "relatively untapped sectors". Since participants at events could become event organizers, this can create a "viral loop", Ben observes.

Investment needs include cash to increase its development capabilities and help in "locking in several key opportunities".

Its slogan for the future: "where remote collaboration is the obvious choice".

Explore the circular economy concept

World Economic Forum (Accenture Strategy): How can businesses accelerate the transition to a circular economy? (LINK)

Here's how businesses can make the circular economy a reality (LINK)

PACE (Platform for Accelerating the Circular Economy): Active projects are already underway in China, Africa, ASEAN, Latin America and Europe. (LINK)

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