Third close brings Circulate's cleantech fund to $53m
Circulate Capital, a Singapore-based environmental technology impact investor, has reached a third close on its second fund with USD 53m in commitments to date.
It follows a second close of USD 25m in December last year and a USD 14m first close the prior June. Fund II extends the strategy of its USD 112m predecessor, which is tightly focused on marine plastics pollution, embracing a broader mandate of climate and circular economy themes.
The third close includes contributions from the International Finance Corporation (IFC), which invested USD 10m, French development finance institution Proparco (USD 5.6m), and the Finland-IFC Blended Finance for Climate Change Program (USD 5m).
Fund II LPs also include Align Impact, Builders Vision, Benjamin Duncan Group, Circocean, DF Impact Capital, Eden Impact, Huang Chen Foundation, Jebnsen & Jessen, Minderoo Foundation, Rumah Group, North-East Family Office, SK2 Fund, Twynam Investments, and Woodstock Foundation.
Fund I was backed mostly by plastics-reliant companies the likes of PepsiCo, Procter & Gamble, Down, Danone, Unilever, and Coca-Cola. Total assets under management now amount to USD 165m, which Circulate said makes it the largest investor of its kind in South and Southeast Asia.
Circulate invests in small and medium-sized companies across climate-tech, plastics, recycling, and circular economy. This includes areas such as deep tech for recycling supply chains and waste management, as well as new materials that are an alternative to single-use plastics.
Standout portfolio companies include Lucro, an Indian start-up that specialises in recycling difficulto-to-manage flexible plastic packaging. Lucro has received investment from both Fund I and Fund II and is said to be rapidly evolving into a material sciences company.
There is a strong focus on South and Southeast Asia, although investments can extend further afield when they address important industries and issues in the region. For example, Circulate participated in a USD 30m Series B round last month for US-based textiles and clothing industry recycling company Circ. It first backed the company in November 2021.
“With institutional investors like IFC and Proparco jumping in alongside global corporations, foundations, and family offices, and several of our portfolio companies achieving significant milestones, it’s clear that the time to invest in the circular economy is now,” Rob Kaplan, CEO and founder of Circulate, said in a statement.
“Taken together, these developments make the case that our blended finance approach has successfully created new market opportunities that generate significant impact and competitive financial returns, bringing us closer to our ambition to unlock one billion dollars to prevent 150m tons of ocean plastic pollution by 2030.”
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