Carlyle joins $221m round for Japan's Spiber

It demonstrates a developing tendency among traditional buyout firms operating in Asia to embrace minority growth strategies amid a mix of incentives such as rising competition for assets, higher valuations, and a greater need for deeper exposure in specialized domains.

Carlyle Japan Partners IV closed last year at JPY258 billion, making it the firm’s largest vehicle yet and possibly the largest-ever Japan-only private equity fund. It will allocate about 10% of the corpus to non-buyout deals, including Spiber. For buyouts, check sizes typically fall in a $200-400 million range.

Spiber specializes in synthesizing protein-based materials that simulate characteristics of spiderweb, which is considered 340 times stronger than steel, pound for pound. The company received a post-money valuation of JPY135 billion in the investment and confirmed plans for an IPO in “the next several years.”

Government-controlled Cool Japan Fund, which led a JPY5 billion round in late 2018, also participated and will make a board nomination alongside Carlyle. They were joined by existing backers Fidelity International, Baillie Gifford, Tokyo Century, Yamagata Bank, and Satake Chemical Equipment. It coincided with a separate JPY10 billion capital raise through a value securitization.

Carlyle describes Spiber as providing compelling solutions to pressing sustainability issues in industries including but not limited to textiles and apparel. The core technology is a proprietary “brewed protein” material that is bio-based, biodegradable, animal-free, and usable as a substitute for cashmere, wool, fur, leather, silk and other animal or petroleum-based materials.

Carlyle, which has invested globally in apparel brands such as Moncler and Golden Goose, expects to mobilize its networks in both the fashion and textile and materials industries to grow the company. This will include a strengthening of management infrastructure, greater exposure to global commercial opportunities, and a ramp-up in manufacturing capacity.

Spiber began production from its first factory in Thailand earlier this year and expects to launch a second facility in the US by 2023. In addition to apparel, the company will target the automotive sector, noting that its materials’ superior lightness and toughness can aid in the production of safer and more fuel-efficient and cars. There are also plans to supply the construction industry.

“Under the strong leadership of co-founders, [Kazuhide Sekiyama and Junichi Sugahara], Spiber has grown from a promising Japanese start-up to the global leading player in the field of sustainable materials,” Yusuke Watanabe, a managing director at Carlyle, said in a statement.

“At Carlyle, ESG [environmental, social, and governance] is fully embedded into our investment and value creation processes, as we seek to optimize the sustainability outcomes of each of our portfolio companies.”

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• Topics
• North Asia
• Cleantech
• Technology
• Industrials
• Expansion
• Japan
• The Carlyle Group
• Fidelity
• manufacturing
• ESG