Small and medium-sized enterprises (SMEs) are the focus of Advance London, a programme designed to help businesses in the capital to ‘go circular’ and embrace resource efficiency.
It was established in January and officially launched in April, and is jointly funded by the London Waste and Recycling Board (Lwarb) and the European Regional Development Fund. Initial response has been very positive, with around 40 businesses having expressed an interest at the time of writing.
When it was launched, Wayne Hubbard, chief operating officer of Lwarb, explained: “The nature of the circular economy (CE) requires collaboration throughout the supply chain and changes the way businesses interact with consumers. As more and more businesses go circular, new opportunities will emerge for SMEs to bring innovative solutions to overcome the challenges that businesses face in this transition. We want London to be a world leader in nurturing CE businesses.”
Advance London runs until December 2019, and its aim is to improve the competitiveness of SMEs through developing more resource-efficient business approaches or scaling up existing circular businesses. It has targets to achieve in its lifespan, which include working with 100 businesses, creating 48 jobs and creating 30 circular products or processes.
When businesses apply to be part of the programme, the team will consider key elements such as the business model’s robustness, legality of the operation, funder’s genuine commitment to the business and to the circular venture.
They will have an engagement discussion to understand the business and its financial overview, as well as whether it is ‘circular’ or has circularity potential. A support plan is then drafted and concrete deliverables agreed.
“Its aim is to improve the competitiveness of SMEs through developing more resource-efficient business approaches or scaling up existing circular businesses.”
Business support on offer is bespoke and will vary depending on the maturity of the business. For example, the Advance London team could help a business to explore new revenue streams by developing a circular business strategy, demonstrate the positive environmental impact of a product/service or enable access to finance.
At present, the programme’s portfolio is weighted towards start-ups, so an aim during the next two years is to increase the number of mature and traditional businesses in the portfolio that it can help shift to a CE business model.
The range of businesses currently on-board is varied and they generally fall into one of the following priority areas: built environment, plastics, textiles, food and electricals. Businesses currently involved range from those that use smart and enabling technology, such as apps that promote food sharing and platforms to facilitate materials reuse; to those making a new product from waste; to smart packaging that reduces food waste or eliminates packaging waste altogether.
As well as the practical business support on offer, Lwarb has designed an investment programme to find and scale CE innovations across London. Recently Lwarb acted as lead investor in the Sustainable Accelerator run by Sustainable Ventures, the UK’s first sustainability accelerator fund dedicated to CE start-ups. Its first funding round was completed in July and the candidates who have been successful will be announced at the end of September.
Advance London is considered to be a pioneer on a global level – as the first city programme that is trying to engage with SMEs in the resource efficiency sphere using an in-house team of advisers, and one that has a complementary investment element to it. As such, it has an enthusiastic team that is excited by the potential of what the programme can achieve – and what it hopes London’s SMEs can achieve with its support.
- Interested businesses can get in touch with Advance London to find out more: www.advancelondon.org @Advance_London
Four businesses talk about the Advance London programme
As previously reported in MRW (‘Digital marketplace for materials ready to reuse’, February 2017) Loop Hub is a software platform being built by co-founders Terry Clarke and Lydia Dutton to optimise the use of materials in the construction sector throughout their lifecycle. Essentially, it will link up available items with the people who need them – covering materials used in the construction, operation and demolition phases – and provide them with all the necessary information on which to base a decision.
The platform is being developed and trialled with Crossrail, with a fairly basic version now up and running that needs further development. At the time of writing, the company was preparing to get the next round of funding, which would pay for the full development of the rest of the tool.
The idea is for the platform to bring together large projects and organisations in a network that will facilitate the use of materials, and for users to pay a subscription for access to the B2B tool. Initially, Clarke and Dutton will do a scoping exercise with potential clients to identify projects that have circularity potential, and help them to understand what can be done. The platform will be used to support this so that it digitises some of the processes.
Due to the nature of the industry, and as the platform is in its infancy, they have found that some human support is initially required to work with clients and the teams involved in the projects to show them how to use the platform and understand what is possible.
“Every project is different: it is different people, different cultures,” Clarke says. “That is something we found out along the way: it can’t just be a software solution – it needs to be a consultancy offering as well.” Another challenge it has faced includes warranties on materials, which is something it has been looking to solve with its partners.
Big projects and big companies have been targeted initially, and clients now include Costain and Stora Enso. Advance London has been helping with bid writing and competition funding, as well as general assessment of the business and networking.
REUSE TECHNOLOGY GROUP
Reuse Technology Group (RTG) takes unwanted IT equipment from large corporates as a disposal and compliance service, and either refurbishes it for reuse or dismantles it for recycling. The business is based in Rainham, Essex, making it well placed to collect equipment from the City.
Darrel Arjoon, RTG managing director, explains that big businesses, particularly in the finance sector, will refresh their IT every three years. Collected equipment is placed on an inventory, then refurbished, upgraded and so on, before being repackaged, re-labelled and resold. Buyers for such equipment are typically smaller SMEs or start-up businesses which may not be able to afford new equipment.
In 2008 Arjoon joined forces with a friend who was buying second-hand kit and selling it on eBay. At the end of that financial year, Arjoon sold his share when he decided to develop a business that offered a more complete solution - and RTG was born.
He explains: “That is where that circular idea started to emerge in my head of this ecosystem: moving [unwanted IT] from larger corporates to SMEs and start-ups: high-quality, low-value kit.”
reuse technology group
Because there is a cost of collection, data wiping and disposal, the company outlines the costs upfront and invoices accordingly. When the equipment is sold on, it will offset the initial costs and share the profits – if there are any. On some occasions it will buy equipment upfront if it is of very high value because it is confident in the value of collecting, cleaning up and re-selling.
Its collection vans are GPS-tracked and RTG uses an in-house team who are security-cleared. Incoming material is scanned by make, model and serial number, allowing each item to be tracked from collection to end buyer.
From Arjoon’s perspective, there is work to be done around educating corporates on joined-up working between their IT and CSR departments: “They are not thinking about it early enough and clearly enough, so it is almost an afterthought when they have done their refresh project that ‘oh, we’ve got to get rid of this kit’,” he explains.
He is proud that his business is circular and sustainable: “We turned over £1.38m in 2016-17 and it is a profitable business. What we are trying to do now is make that connection stronger between corporates, SMEs and downstream recyclers, and optimise logistics a bit more. We are trying to create almost an eco-system in London so that IT kit doesn’t have to leave the capital.”
His vision is for a cloud platform that would enable corporates to upload their unwanted IT for local processing businesses to see. Refurbished IT would then also be uploaded for onward sale.
Arjoon describes his relationship with Advance London as a symbiotic one: “One of the things I am hoping to do is help them as a mentor with start-ups in terms of the finance and business side of things, and really demonstrate to smaller businesses how a circular business model can work.”
WE BUY YOUR BUGGY
The scheme is the brainchild of Zarina Osman and her husband – a conversation about the cost of pushchairs led to the pair wondering if there could be an online valuation and sales site using the same model as We Buy Any Car.
Over a couple of years, Osman built up a database of all the pushchairs on the market – including serial numbers, brands, names, prices – working one day a week while her mum looked after the kids. Her husband, who works in compliance in the City and builds systems as part of his job, knew how to build algorithms and organise and collate data. They worked with a developer to put the site together.
We Buy Your Buggy was launched in October 2015. The plan was to buy used or nearly new pushchairs (the average age of a used item is three to four years) at prices well below what people would sell them for on eBay or privately, and then sell them at a price that made a worthwhile profit, factoring in the cost of cleaning, repairs and couriering.
For sellers, the site works out an instant valuation and, while the price given would be below that of a private deal, it would guarantee a convenient and quick sale. Sellers have to complete assessment questions online, and the system will automatically decline to value pushchairs that do not meet minimum criteria. Once a sale has been agreed, the pushchair is collected, cleaned and refurbished as needed, photographed and uploaded for sale on a second site, Buggy Revival, which launched in December last year.
Osman says she came across Advance London through a networking event and has since had meetings to discuss the business and formulate a support plan. The organisation’s support and having someone to talk to has been of particular help to a solo operator such as herself, and the team has helped with new avenues for funding as well as suggesting ideas to develop the business.
As the sales side of the business is new, the company is not yet generating the revenue to pay anybody. But Osman hopes that she will be able to take a salary next year and grow from there: all the systems are now in place, so it is a case of scaling up.
Aeropowder started out as a research project by co-founder Elena Dieckmann. She was looking at waste streams in society, focusing on keratin-based materials. With 10,000 tonnes of waste feathers produced in the world each day, Dieckmann honed in on this material as the waste to tackle.
She met co-founder Ryan Robinson and asked for his help to do some experiments. “Things snowballed from there,” he explains. “We put the idea forward for the mayor of London’s low-carbon award and won it. That forces you to form a company when you win an award like that!”
After lots of testing, Aeropowder has focused on turning unwanted chicken feathers into an insulation material because feathers have excellent thermal performance. Support from Advance London has come in the form of helping to apply for big awards and access funding, and the team is poised to help with carrying out a lifecycle assessment on its product when it is ready.
“We have come a long way since we started,” says Robinson. “We have now had manufacturing trials with partners around Europe. We are closer to the end product, we are getting more testing done, and engaging with potential customers and clients.”
When we speak, Robinson is on his way to meet a building industry consultant who is interested in the product and helping to get it to market. But he adds that the construction sector is quite conservative, so introducing new materials can be a lengthy process.
“It is still early days, but we have worked out a lot of the processes and have it on a pilot scale. We are not churning out kilos and tonnes of it right this second but hopefully [we will be] soon.”
Robinson explains that waste feathers typically go to one of three disposal routes: landfill, incineration or a low-grade, low-value animal feed – although the last cannot be done in the UK, so feathers for this option are exported.
“We are looking to do something much better and pass value back to everyone, not just the end customer, because they have a sustainable product,” Robinson explains. The product ticks lots of boxes: it is a natural material, which leads to a healthier environment, it can displace non-sustainable products and it eliminates a waste stream.
“We are in a pretty good relationship with [the big players in the UK poultry sector] – they are on-board and quite keen to work with us to find value for their feathers, so they are helping us with our journey. We have got definite commercial, industrial interest from both the supply [side] and the customer,” he adds.
While Aeropowder is still in its infancy, its potential is clear. As Robinson explains: “We are a new company, we are based in London and that is where we are going to start – but chickens and feathers are everywhere. We would love to develop technology that is sustainable and capable of being used all around the world, so that we would have local manufacturing of sustainable products. That is the big picture goal – it might take us a few years to get there.”