Material wealth: Scrap metal trading marketplace Metaloop raises $17M

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European Union (EU) lawmakers this month announced plans to reduce waste and increase recycling across the bloc, proposing to collect and process 45% of 16 identified “strategic” raw materials by 2030. This includes metals such as copper, which are used. Everything from computers and TVs to household wiring and electric generators.

At the same time, countless startups are raising large amounts of VC dollars for technologies that help people and industries reuse and recycle materials like plastic; battery; carbon fiber; carpet; And, indeed, metal.

One such startup is Metaloop, a seven-year-old Austrian company that connects scrap metal sellers with buyers, which announced today that it has raised €16 million ($17 million) in a Series A round of funding.

Now by “sellers” we don’t mean individuals or businesses who collect scrap metal with the express intention of selling it — in all likelihood, they already have the necessary knowledge and networks to offload their material profits. No, in Metalloop’s world, the seller is most likely an industrial entity where the scrap metal is a by-product of something else they produce — and where they don’t have the expertise to monetize their offcuts. These can range from small localized SMBs to industrial manufacturers spanning the automotive, electronics or construction sectors to multi-billion dollar multinationals.

“The scrap metal market is not transparent and difficult to navigate,” Metaloop co-founder and CEO Jan Pannenbäcker explained to TechCrunch. “It is also unclear who the market participants are and what the prices are in a constantly moving commodity market. But at the same time, scrap metal is extremely valuable and suitable for recycling.”

The global scrap metal recycling market was pegged as a $58 billion industry in 2021, a figure predicted to nearly double by the end of the decade. The reasons for this are manifold, including the important role metals play across the industrial spectrum; the fact that metals are limited (and therefore prone to scarcity); And arguably the most important factor of all – metals are highly recyclable compared to other materials, at least.

“Metal can be recycled endless times,” Pannenbacher added. “Recycling Metals Alternatives to Virgin Metals from Mining and Reduces Greenhouse Gases.”

Indeed, while extracting fresh metal from ore is extremely energy-intensive, recycling is a great solution if sustainability is the name of the game — the energy required to melt aluminum from scrap, for example, is about 5% of that required for mining.

Iron trade

Founded in Graz, Austria in 2016, Metaloop was originally known as Schrott24, focusing on the “smaller end of the value chain” such as private individuals and artisans. That business actually still exists, but it only represents a “small single-digit percentage” of the broader Metaloop revenue stream.

Buyers looking for a supply of unused scrap metal can include anyone from smelters to steel mills and foundries. Through Metaloop, sellers list their available scrap metal which is then matched with buyers. Metalloop then takes responsibility for fulfilling, form contracting and orchestrating all transport logistics.

Metaloop Dashboard

Metaloop Dashboard Image credit: Metaloop

This effectively positions Metalloop as the “merchant of record” — it’s technically doing all the buying and selling, assuming legal responsibility for the transaction, without owning any physical assets like yards or trucks.

It also allows Metaloop to “pool and consolidate” volumes of metal, meaning that, for example, if a buyer is looking for X amount of copper, Metaloop can combine loads from multiple sellers to complete a transaction. And this is how Metaloop manages to create value through economies of scale.

“By aggregating volume, identifying good buyers and providing additional services such as transportation and financing, we can improve pricing for sellers, provide materials to buyers they otherwise wouldn’t have access to, and (we) can make a margin in the meantime,” Pannenbacher said.

And so Metalloop works to address the opaque “inefficient” metal-trading market and make it more manageable for businesses whose core function is not metal-trading. Buyers – such as smelters – can gain better access to increasingly sparse secondary raw material supply chains.

Like many traditional industries, Pannenbacher says the scrap metal sector today is largely driven by manual processes and Excel spreadsheets, with transactions only taking place between local players “due to a general lack of trust”.

It’s worth noting that there are some tech platforms in related spaces, such as Rebus, which focus on new (rather than scrap) metals. And then there is Metalshub which is geared more towards the mining industry. Metaloop seems to be onto something, especially when it comes to online marketplaces for trading scrap metal.

Pannenbäcker did not disclose any specific customers, but said Metaloop currently serves 600 customers worldwide. The company claims a team of around 50 people, approximately half of which are based in the Austrian headquarters, with the rest distributed globally.

Previously, Metaloop had raised €4.2 million ($4.5 million) in seed funding, and for its latest $17 million Series A, joined New York’s Firstmark Capital as a lead investor, with participation from FJ Lab, Statecraft Ventures and Silence VC. .

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