Investing in Early-Stage Innovations: A Critical Step to Accelerate Plastics Circularity

The statistics are daunting — the OECD estimates that roughly 150 million tonnes of plastic waste have accumulated in rivers and oceans by 2020,¹ and this will continue to increase. Over the last several years, countries have gathered multiple times at meetings of the Intergovernmental Negotiating Committee (INC) in an attempt to stem this tide of plastic waste and agree on a Global Plastics Treaty. At the latest INC meeting in December 2024, the matter of financing remained unresolved — particularly how much funding is needed, who will provide it, and the mechanisms for doing so. With the INC process extending beyond its initial timeframe, there is an expectation that greater clarity on the finance elements will come from the upcoming INC 5.2 in August.²

This clarity will be particularly beneficial for start-ups and early-stage companies that traditional financiers, such as banks, deem to be too risky. Venture funding — which can range from the thousands to multi-millions — supports innovation that is higher risk, but also brings higher potential returns and impact. Such funding also serves as a signal to other investors on the investability of a growing venture.

Given the need for innovative solutions to the plastic pollution crisis, we know that investment in early-stage companies is lagging. Based on data from the Plastics Circularity Investment Tracker, investments in early-stage companies totaled only US$ 4 billion between 2018 and 2023. This represents just 2% of total investments in plastics circularity across the same time period.

Below, I highlight three examples of how early-stage investment is essential for incubating and scaling innovative solutions to plastic pollution.

1. Scaling up a women-focused operational model in waste management

Established in 2014, Green Worms, a waste collection service provider in India, has secured funding from several impact investors, including Upaya Social Ventures, Acumen, and Rainmatter. Their first external funding — US$ 100,000 in convertible debt in 2021 — enabled the establishment of their first material recovery facility (MRF) and the creation of jobs for low-income women. Subsequent investments supported the expansion of their MRF and the development of a 4,700-metric-tonne flexible film recycling unit.

In recent years, increasing attention to responsible sourcing in the recycled plastics value chain has led to a growing focus on supporting women in the waste management sector.³  This momentum has driven more investments in inclusive business models, where early-stage funding is especially critical. To date, Green Worms has engaged roughly 2,200 women in waste collection services, with an additional 400 women employed directly at their sorting facilities.

2. Building confidence through catalytic financing

Dalmia Polypro (“Dalmia”), a recycler of PET and polyolefins based in India, demonstrates how private capital from a single investor can not only accelerate growth, but also attract interest from other investors. Dalmia received its first third-party investment from Circulate Capital in 2020, with follow-on investment in 2023. These investments helped Dalmia build a PET recycling facility and played a catalytic role in securing a subsequent US$ 30 million loan from the U.S. International Development Finance Corporation (DFC) to develop a greenfield recycling facility with a capacity of 171,000 tonnes.

Without full access to a company’s information, external investors look for signs in its actions and traits that reveal its true value or potential.⁴ Dalmia’s case illustrates how the first external investor can signal investment potential through its catalytic financing — triggering a positive ripple effect, including a follow-on investment from an international development financial institution. This investment also served as a vote of confidence in both Dalmia and India’s recycling sector.

3. Driving growth with strategic and financial investments 

Greyparrot, a UK-based AI sorting technology provider for MRFs, received initial venture capital funding in 2019 and 2020, which supported the development and commercialization of its technology, as well as team expansion. The major boost came through their Series A funding in 2022, enabling Greyparrot to move from early-stage commercialization to installing units across MRFs in various locations. In early 2024, Greyparrot’s growth culminated in a strategic deal with Bollegraaf, a manufacturer of recycling plants. This partnership broadened Greyparrot’s customer base and capabilities by leveraging Bollegraaf’s market positioning and technology. Greyparrot currently has an estimated 140 units in 55 facilities across 20 countries.

Having both financial and strategic investors in early-stage companies — particularly those with a technology focus — offers the benefit of combining capital with market insights and technical expertise. This dual backing is especially valuable in the plastics circularity sector, where it can accelerate the scale-up of sustainable business models.

Enabling investment at scale: the role of global policy and coordination

Investing in plastics circularity is both capital- and research-intensive, especially when it comes to initiatives like alternative materials, systemic changes in plastic waste management, and the development of recycling infrastructure and new technologies — such as Greyparrot, which demonstrates how steady funding enables them to develop an AI-backed innovation that requires deep research.

Aside from the intensive effort required, embedding circularity into the plastics value chain — as Green Worms does by addressing both environmental and social aspects — also means a shift away from long-standing industry practices. While ecosystem players are emerging, the enabling environment remains fragmented, specifically in terms of regulation and infrastructure. The lack of harmonized regulations across countries adds to the complexity, particularly for multinational businesses, while infrastructure gaps continue to hinder progress, especially in developing regions.

These challenges have contributed to funding levels in plastics circularity that remain well below what is needed, especially for early-stage businesses. More robust regulation will eventually attract higher levels of investment into the sector, which is particularly beneficial for emerging economies where funding from development institutions is still much needed — as illustrated by the loan committed by DFC to Dalmia to build recycling infrastructure.

Despite the growing voluntary and mandatory initiatives, a concerted global effort is essential — and this is achievable through a robust Global Plastics Treaty. As emphasized by the Business Coalition for a Global Plastics Treaty, global rules can level the playing field for businesses and unlock economies of scale.

The upcoming INC session offers a pivotal opportunity to craft and adopt a treaty that aligns on the mechanisms needed to mobilize significantly greater investment in the sector — an opportunity the world cannot afford to miss.

Endnotes

1. OECD. (2024). Policy Scenarios for Eliminating Plastic Pollution by 2040 [online]. Available from: https://www.oecd.org/en/publications/policy-scenarios-for-eliminating-plastic-pollution-by-2040_76400890-en.html
2. INC-5.2 is the second part of the fifth session of the Intergovernmental Negotiating Committee on Plastic Pollution to develop an international legally binding instrument on plastic pollution, including in the marine environment, which will take place from August 5 to 14, 2025, in Geneva, Switzerland.
3. A reference for understanding responsible sourcing is the Harmonized Responsible Sourcing Framework for Recycled Plastics, developed by The Circulate Initiative.
4. Esposito, C.D., Szatmari, B., Sitruk, J.M.C., and Wijnberg, N.M. (2024). Getting off to a good start: emerging academic fields and early-stage equity financing. Small Business Economics, 62, pp. 1591–1613 [online]. Available from: https://link.springer.com/article/10.1007/s11187-023-00816-9