This month, European Union (EU) legislators unveiled a plan to minimize waste and boost recycling across the union, aiming to collect and process 45% of 16 designated “strategic” raw materials by 2030. Among these materials is copper, a crucial element found in a wide range of products, from computers and televisions to household wiring and electric generators.
Simultaneously, a multitude of startups have been securing significant venture capital investments for technologies designed to facilitate the reuse and recycling of materials such as plastics, batteries, carbon fiber, carpeting, and, notably, metals.
One of these startups is Metaloop, a seven-year-old Austrian company that connects sellers of scrap metal with potential buyers. Metaloop recently announced it has secured €16 million ($17 million) in a Series A funding round.
It’s important to clarify that when we refer to “sellers” in the context of Metaloop, we are not discussing individuals or businesses primarily engaged in collecting and selling scrap metal. Instead, the sellers in Metaloop’s ecosystem are likely industrial entities where scrap metal is a by-product of their primary operations. These sellers may lack the expertise and networks needed to monetize their scrap materials effectively, and they span a broad spectrum, from small localized SMBs to billion-dollar multinational corporations in industries like automotive, electronics, and construction.
Metaloop’s co-founder and CEO, Jan Pannenbäcker, pointed out the challenges these industrial sellers face in navigating the non-transparent and complex scrap metal market. Many are unsure about market participants and fluctuating prices in this commodity market. However, scrap metal holds substantial value and offers excellent recycling potential.
In 2021, the global scrap metal recycling market was valued at $58 billion, a figure expected to nearly double by the end of the decade. This growth is driven by metals’ critical roles across various industries, their finite nature leading to potential scarcity, and their recyclability compared to other materials.
Recycling metal is significantly more sustainable than extracting fresh metal from ores, which is energy-intensive. For instance, the energy required to melt aluminum from scrap is only about 5% of what’s needed for mining.
Founded in Graz, Austria, in 2016, Metaloop initially focused on the “small end of the value chain,” serving private individuals and craftsmen under the name Schrott24. While this part of the business still exists, it now represents only a small portion of Metaloop’s overall revenue.
Metaloop acts as an intermediary between sellers and buyers of scrap metal. Sellers list their available scrap metal, which is then matched with suitable buyers. The company takes responsibility for the entire transaction, including contracting and managing transportation logistics.
By functioning as a “merchant of record,” Metaloop can aggregate and pool volumes of metal. This approach allows them to combine loads from multiple sellers to fulfill a buyer’s order, leveraging economies of scale to create value.
Metaloop’s primary aim is to streamline the opaque and often inefficient metal-trading market, making it more accessible for businesses whose core focus is not metal trading. Buyers, such as smelters, gain improved access to a secondary raw materials supply chain that is becoming increasingly scarce.
In the scrap metal sector, many processes are still manual and rely heavily on Excel spreadsheets. Transactions typically occur between local players due to a lack of trust in the market.
While there are tech platforms in related spaces like Reibus and Metalshub, which cater to new metals and the mining industry, respectively, Metaloop appears to be pioneering the online marketplace for trading scrap metal.
Although Metaloop didn’t disclose specific customer details, the company claims to serve 600 clients worldwide. It boasts a team of approximately 50 employees, with about half based in its Austrian headquarters and the rest distributed globally.
Before securing €16 million ($17 million) in Series A funding, Metaloop had raised €4.2 million ($4.5 million) in seed funding. In this latest funding round, New York’s FirstMark Capital led the investment, with participation from FJ Labs, Statkraft Ventures, and Silence VC.
