IFC looks to back Circulate Capital's second fund
The International Finance Corporation (IFC) has proposed a USD 10m commitment to Singapore-based Circulate Capital’s second fund dedicated to reducing plastics pollution.
The vehicle – known as Circulate Capital Disrupt, though referenced in the IFC filing as Circulate Capital Ocean Fund I-B – has a target of USD 50m and a hard cap of USD 100m. A second close of USD 25m came in December 2021.
In addition, Finland IFC Climate Change Program is expected to contribute USD 5m. This commitment is described as blended finance co-investment and it provides downside protection to facilitate IFC’s direct investment in the fund.
Other LPs that have already disclosed their involvement include family offices and philanthropic organizations such as Builders Vision, Benjamin Duncan Group, Circocean, DF Impact Capital, Eden Impact, Huang Chen Foundation, Minderoo Foundation, Rumah Group, and Twynam Investments.
The new fund is positioned as a companion strategy to its predecessor, Circulate Capital Ocean Fund, which closed on USD 109m. Most of the LPs were plastic-reliant companies like PepsiCo, Procter & Gamble, Dow, Danone, Unilever, Coca-Cola, and Chevron Phillips Chemical.
Whereas Fund I had a relatively restrictive mandate, concentrated on preventing marine plastics pollution in the waters around South and Southeast Asia, Circulate Capital Disrupt focuses on the nexus of climate-tech and plastics, recycling, and the circular economy. It will target a range of materials and deep tech concepts related to the recycling supply chain.
IFC added that the new fund has a two-pronged strategy: at least 70% of the corpus is to be invested in growth capital in companies across the recycling and waste management value chain in South and Southeast Asia; and up to 30% can go into early-stage companies looking at targeted innovation to combat plastic waste.
Among the initial investees are biomaterials developers Arzeda and Phase Change Solutions, as well as Circ, a recycling industry supplier with technology capable of separating and recovering textiles regardless of their ratio of polyester to cotton.
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