New Fund to Scale Breakthrough Circular Solutions

Managed by Demeter and Cycle Capital, the impact investing Circular Innovation Fund (CIF) aims at scaling growth-stage circular innovations.

Cycle Capital and Demeter, two cleantech-focused capital managers, announced one day ahead of Earth Day in April the first close for the new 160 million US-Dollar (about 150 million Euro) Circular Innovation Fund with the participation of anchor investor L‘Oréal. The French multinational cosmetics and beauty company is contributing 50 million Euro through its “L‘Oréal for the Future” sustainability program. The fund also benefits from a broad range of investors including, strategic investor Axens, family offices including Haltra and Claridge, as well as private investors and the managers, the information says.

According to L’Oréal, the new fund “will support start-ups and companies across North America, Europe and Asia, which are developing circular use of resources across various sectors, including new materials from the bioeconomy, circular solutions for packaging, recycling & waste, logistics, eco-efficient processes”. As an impact-investing fund, it would utilize a robust, reliable, and innovative impact measurement methodology that integrates due diligence and continuous monitoring of critical non-financial KPIs (key performance indicators) including greenhouse gas emissions reductions, resource use and diversity over the investment horizons of portfolio companies.

As reported by the fund managers Cycle Capital and Demeter, CIF is classified as Article 9 under the EU’s Sustainable Finance Disclosure Regulation. “The fund managers‘ compensation is also aligned on the achievement of a selection of pre-determined impact goals.” Consecutive to the first close, CIF would announce indirect investment in two early-stage funds focused on circular innovation – U.S.-based Closed Loop Venture Fund II and European Circular Bioeconomy Fund (ECBF).

“Founded in 2014, Closed Loop Partners is a New York-based investment firm, comprised of venture capital, growth equity, private equity and catalytic capital, as well as an innovation center focused on building the circular economy. The firm’s venture capital arm, Closed Loop Ventures Group, was launched in 2017 with one of the first venture funds dedicated to investing in disruptive, early-stage companies developing breakthrough solutions to accelerate the transition to the circular economy. In 2021, the Group launched its second venture fund to build on this strategy. To date, the team has made 30+ investments across both funds, targeting strong, early-stage venture returns.

ECBF is the first venture fund exclusively dedicated to investing in growth-stage companies in the European bioeconomy, including the circular bioeconomy. The fund aims to make sustainable investments in our future and speed up the shift from a fossil-based to a bio-based economy. Thus, ECBF backs up businesses with high potential for innovation, favorable returns, and sustainable impact.”

As reported, the Circular Innovation Fund would also sponsor a global acceleration program through a partnership with Cycle Momentum. “The program will offer support for start-ups at the Seed/Series A stage with cohorts across Europe, North America and Asia over three years”. CIF’s investment team was actively evaluating a rich pipeline of investment opportunities and welcomes inquiries and collaboration with entrepreneurs and co-investors.

About the Circular Innovation Fund

CIF is a global growth stage venture capital fund focused solely on circular innovation. It is a joint venture between leading cleantech capital managers – Montreal-based Cycle Capital and Paris-based Demeter. The fund invests in growth-stage companies from North America, Europe and Asia developing breakthrough new materials, circular packaging, recycling and waste innovations, logistics, as well as eco-efficient processes & design, and circular business models.

(Published in GLOBAL RECYCLING Magazine 2/2022, Page 8, Photo: OpenClipart-Vectors /