Hamelyn and the circular economy revolution

From linear to circular economy

For decades, the UE GDP has grown almost in parallel with the use of natural resources. This trend is a consequence of our current production system of linear economy, based on extracting, producing and discarding resources. This is confirmed by these Eurostat data from 2022 on the evolution of resource productivity compared to GDP and domestic resource consumption.

This linear consumption model leads to two major consequences. First, we extract natural resources beyond the planet's limits.In fact, the United Nations estimates that if the world population reaches 9.6 billion people in 2050, it will take the equivalent of almost three planet Earths to extract the natural resources needed to maintain our current lifestyle. Mathematics are that cruel: it is not going to work.

The second consequence of this linear consumption model is that we generate significant amounts of waste. In 2018, 2.337 million tons of waste were generated in the UE, equivalent to 5.2 tons of waste per capita, and the OECD predicts that annual waste generation will increase by 70% between now and 2050. Waste management can have a serious impact on the environment. Landfills lead to air, water and soil pollution, while incineration results in emissions that pollute the atmosphere. According Eurostat, in 2018, only 54.6% of EU waste was treated in recovery operations. 37.9 % of the total was recycled, 10.7 % was used for backfilling activities,and 6.0 % was used for energy recovery. However, the remaining 45.4% was landfilled (38.4%), incinerated without energy recovery (0.7%), or eliminated in other ways (6.3%). As it can be seen, we have much room for improvement in waste management.

The model is not sustainable and this is why we have to change our habits and move from the linear economy to the circular economy. The circular economy is a production and consumption model that involves sharing, renting, reusing, repairing, renewing and recycling existing materials and products as many times as possible to create added value and therefore extend as much as possible the lifecycle of products.

In 2020, the European Commission adopted the new Circular Economy Action Plan, after publishing the first action plan in 2015. This new plan is one of the main components of the European Green Deal, the European agenda for sustainable growth that aims to reach zero net greenhouse gas emissions by 2050, decouple economic growth from resource use, and leave no person behind. The new circular economy action plan announces initiatives across the entire product life cycle. It focuses on how products are designed, promotes circular economy processes, encourages sustainable consumption and aims to ensure that waste is avoided and resources used are kept in the EU economy for as long as possible. The key is to change our consumption habits, and at the Bolsa Social Fund we believe that, if we are creative, second hand consumption can play a more important role than we think.

Hamelyn's value proposition

We have all tried to sell things second-hand, and we can agree that it is a tedious and unattractive process. E-commerce has evolved a lot for buyers, who have an increasingly easier time acquiring what they need, but if you want to sell something you no longer need, it is complicated. However, the startup Hamelyn was born to help make this change a reality. It has developed a technology platform that allows you to sell used items quickly and easily. They have thought a lot about how to make it easy for the user of an asset that they no longer use, but that can have much more life. Hamelyn's model seeks to eliminate all the frictions that we find when selling used products online, and its value proposition offers instant prices, as well as the collection of products at home. In fact, they reduce the time it takes to sell a product to a maximum of 48 hours.

Hamelyn has started in the second-hand book market. It has decided to start with this sector because books in Spanish are bought all over the world, it is a cheap product to store, it is easily labeled by its barcode and the business is easily scalable through marketplaces such as Amazon, Ebay, Iberlibro and others. But naturally they are not going to stop there. Their goal is to expand the business to the purchase and sale of other categories such as furniture, tools, sports equipment, fashion or electronics.

The impact is clear: by giving new life to existing products, we reduce the consumption of the planet's natural resources and the waste generated. This is why we liked Hamelyn, for operating in the circular economy sector and the potential they have to generate a great impact. In addition, the company has excellent traction, despite only being in the market for a few years. Their turnover is growing at a very good pace: in 2021 they invoiced 291 thousand euros, in 2022, 762 thousand euros, almost three times more than the previous year, and this year they have expectations of reaching 2.4 million euros. 

Impact

At the Bolsa Social Fund, we invest in companies whose exceptional founding team and high growth potential are accompanied by a transformative mission. To this end, we seek ways to measure impact through relevant indicators, which in the case of Hamelyn we have defined as 3 objectives for 2023.

  1. First, we want to promote change in consumption habits by reusing products and reducing waste generation. We will measure this objective by counting the number of products revalued thanks to the purchase of second-hand products through Hamelyn and their contribution to the circular economy, and the kilos of waste avoided as a result.
  2. Secondly, we want to reduce the consumption of natural resources derived from the production of consumer goods. We will use two indicators to measure this objective: for the specific case of books, we will look at the number of trees that have not been cut down and the liters of water saved thanks to the purchase of a second-hand book. For other categories, we will look for ad hoc indicators. Third, we want to reduce CO2 emissions generated during the production of consumer goods. We will measure this objective by considering the CO2 emissions avoided thanks to the purchase of a second-hand product, rather than a new product.
  3. We also want to reduce the CO2 emissions generated during the transportation of products within the Hamelyn cycle through mechanisms to reduce the carbon footprint of transportation, such as moving towards sustainable logistics, and we have asked the company to develop an action plan for sustainable logistics.

Besides, second hand is lovely. I have always thought that throwing away a good book is a sin. When we put a second-hand book into circulation, we throw a castaway bottle into the sea with a beautiful message addressed to a stranger, who will be able to take advantage of it as we did. The same happens with objects that are no longer useful to us, but that can be useful to other people. Things can have a thousand new lives. Much remains to be done to change the production and consumption model. But it all starts with us, by changing our habits. Hamelyn has come to make it easy for us.

José Moncada

Managing Partner at Fondo Bolsa Social

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