We’re thrilled to have launched TrueCircle’s second product, TrueCircle Trade, a digital B2B Marketplace which dramatically transforms the material trading process between MRFs*/Sorting Plants and Recycling/Reprocessing facilities. Since our soft launch a few weeks ago, we’ve facilitated >£1.1m of successful transactions across Europe.
TrueCircle’s first product, TrueCircle AI, enables facilities to track continuously and improve the quality of their output materials as well as maximise recovery rates. Within months of installing TrueCircle, many have been able to record significant improvements in these metrics.
Naturally, facilities started thinking about integrating our transparent TrueCircle AI data into their selling process to share it with potential buyers and ensure they were maximising their revenue. Before TrueCircle AI there had never been any reliable quality data available to buyers, which has led to facilities constantly underpaying for high quality material; there was no practical way to validate a claim that a seller’s output was consistently high quality.
We were also hearing regularly from our customers that they were frustrated by their overall trading processes, which involved lots of manual admin and offline work. It was at this point we realised we could optimise their whole trading process and address the inefficiencies that were holding them back. Recyclate trading of this sort is a $10bn industry in Europe alone, and it is ripe for technology led innovation.
Like many other offline B2B physical goods industries, the trading process hadn’t yet been brought online. This leads to bad outcomes for both sellers and buyers but let’s focus below on how sellers today are suffering:
With only a handful of offline offtakers, sorting plants were beholden to the prices that this limited buyer pool could offer. With such a small pool, any issues at offtaker sites (e.g. their own customer relationships, downtime) have a dramatic negative impact on the revenue/tonne that the sorting plant is generating.
In falling markets especially (like we have experienced in the last few months), this problem has been accentuated even further. If one’s small buyer pool decides to stop buying (which happens in falling markets), the seller struggles to sell material at all or if they manage to do so, at a heavy discount.
Even in rising markets, sellers weren’t maximising revenue because, without reliable quality data, their offtakers were refusing to pay premiums for their consistent high quality. Similarly they weren’t able to refute quality disputes in any convincing way and so were experiencing revenue leakage.
Waste transactions are complex regulated transactions which have a number of administrative steps:
In today’s world, these tasks are generally performed offline by people. This is often split across multiple teams at recycling facilities, taking up time from sales, purchasing, operations, logistics, and admin, which could be better utilised to generate greater long term value for their businesses.
The combination of a heavily regulated industry and an overreliance on manual work means risk of non compliance is high (e.g. documents not being filled out correctly or not being reported correctly to the official bodies). The severity of non-compliance if discovered is now much higher as the relevant authorities are rightly cracking down on breaches far more heavily than ever before.
We’ve set out to digitise the end-to-end material trading process, underpinned by reliable and transparent quality data. To do this, we’ve applied our deep experience developing transformational online products in several other complex and regulated industries, such as retail banking.
Given we are hyper focused on the recycling industry, unlike other broader marketplaces like Amazon, we’ve been able to invest in building highly specific efficiency tools that simplify trading teams’ day-to-day interactions with new and existing customers. Our efficiency tool set currently includes:
It was very important for us to give our customers access to a wider pool of verified buyers to show them the benefits of buyer diversification. Even large multinational players are typically dealing with a pool of only c. 5 buyers per output material and as a result only do business with a fraction of the addressable market. For example, the number of buyers (Recyclers) for recycled post-consumer plastic in Europe was about 650 in 2020 and is growing by 13% year-on-year given increasing demand from FMCGs to use recycled material in their new packaging. Our buyers have also benefited from a wider pool of verified suppliers, allowing them to build up a more diversified supplier base and demand higher material quality.
We’re super excited about the additional features we have in the pipeline to enhance the marketplace even further. For example, we are positioning ourselves to launch the industry’s first transactional pricing index with exact quality references (the only indices that exist in the industry today are journalistic indices without quality references). This is crucial to give sorting plants motivation to improve their output quality. We also look forward to embedding Scope 3 emission tracking into TrueCircle Trade so that TrueCircle participants can be sure they are doing business with suppliers/buyers who are actively reducing their own emissions.
In building TrueCircle Trade, we’ve been very conscious about combining technology expertise with real industry experience. We’ve added to the team former MDs of Sorting Plants and Recycling plants as well as individuals who have built and run service businesses for the waste industry (e.g. freight forwarding). We think great things can happen when these different types of people collaborate.
There is a wave of technology enabled B2B marketplaces that are sweeping across other core industries that have, until now, been hamstrung by a completely offline way of trading.
We were inspired by the way that they have been able to connect new buyers and sellers by fostering new trading relationships. We have also been inspired by the way in which they have optimised how long standing buyers/sellers transact with each other.
Here are just a few that we’ve been inspired by and continue to learn from on our journey:
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