The start-ups driving Circular Fashion in Europe

SHARE THIS ARTICLE
SOCIALICON

Paris-based sustainable fashion company Vestiaire Collective just announced to have reached unicorn status in its new €178 million round, making it the latest European start-up to join the exclusive club. The second-hand fashion marketplace has experienced rapid growth over the last three years and has already made its way into the United States and Asia Pacific markets. The growth was certainly accelerated to some degree by the pandemic which favored digital solutions. But more importantly, Vesitaire Collective was early to capture on the material and deep-rooted shift in consumer interest towards sustainability. And this is not limited to buying and selling pre-owned clothing: especially younger consumers are increasingly aware of the environmental and social impacts of the fashion industry, demanding among others more sustainable and longer lasting products and better end-of-life solutions.

Indeed, we can’t neglect that the fashion industry has a broader sustainability issue: already before the pandemic, the equivalent of one garbage truck of textiles was landfilled or burned globally every second. This has likely increased further over the past months as shops are closed and unsold clothing piles up in fashion and textile warehouses. Furthermore, less than 1% of products are recycled into new garments and despite efforts by some players 12% of fiber is lost in production (Source). Not to forget that in some production facilities, garment workers toil 16 hours per day earning a fifth of the minimum wage required for a decent life.

10% of global carbon emissions are calculated to stem from fashion today. This could increase to up to 25% in 2050.

On a positive note, there are already several companies who strive to move the fashion industry away from the take-make-waste thinking towards circular strategies which respect all three pillars of the Triple Top Line: economic growth, environmental impact, and social equality. (Read more about the Triple Top Line idea here). Accenture estimates that circularity holds an economic value potential of $30-90 billion for the fashion industry. Indeed, it could become the biggest disruptor to the industry over the next decade.

At MVP, our focus is on partnering up with start-ups that have the potential to transform value chains and drive change in the most CO2 intensive and pollutive industries. And we see that alongside Vesitaire Collective, an entire ecosystem of start-ups has emerged in Europe that have this potential. They are developing bio-degradable raw materials, bringing transparency to the supply chain, enhancing the lifetime of clothes with rental or second-hand platforms, or recapturing raw materials from non-reusable products.

To provide an insight on our view of the industry, we want to share this (non-exhaustive) map of European Circular Fashion start-ups. It includes companies in very early development stages as well as more established players that have already raised significant amounts of funding. We want it to be a source of inspiration, collaboration, and a starting point for discussions.

Let us know what you think about the landscape and who is missing.

Circular Fashion Landscape

________________________________________

Julian is Investment Associate at Munich Venture Partners. While he is not a fashion specialist nor known for an outstanding dressing style, he has great interest in the field of Circular Economy and sustainable consumption in general. With this lens, he looks at different industries and sectors. Feel free to contact him via LinkedIn.

by Julian Klaiber