The latest report Circular Startup Funding in Europe 2025, produced in collaboration between TheCircularLab, Ecoembes and Net Zero Insights, highlights a shift in Europe’s circular innovation ecosystem: the market is becoming more selective, but also more robust.
In 2025, total investment in circular economy startups reached €4.9 billion across 377 deals, marking a decline compared to 2024 and reflecting a more demanding and disciplined environment.
However, this contraction does not indicate a loss of interest, but rather a concentration of capital in fewer, more mature projects with greater scalability potential.
In this context, the circular packaging sector stands out in particular.
Despite the overall slowdown, circular packaging remains one of the most resilient verticals, attracting approximately €590 million in investment in 2025. This trend reflects sustained investor confidence in sustainable packaging solutions, even within a more restrictive landscape.
From a technological perspective, the investment focus is very clear. Primary packaging — that which comes into direct contact with the consumer — accounts for more than 78% of deals, making it the main area of innovation.
In addition, investment is primarily directed towards materials development, particularly biopolymers, which represent nearly 68% of deals.
Consistently, more than 85% of capital is concentrated in upstream stages of the value chain, such as material design and production, while areas such as logistics are losing relevance. This highlights that the real transformation in packaging lies not so much in its use, but in its very nature.
Overall, the circular packaging sector is not only withstanding the market adjustment, but is also consolidating its position as one of the key strategic areas within the circular economy. The combination of regulatory pressure, consumer demand and the need for material innovation positions it as a critical driver in the transition towards more sustainable models.