News & Resources | 2022

The European Investment Bank Commits up to $20 million to Circulate Capital Ocean Fund I-B

April 26, 2022

Singapore, April 26, 2022 – Circulate Capital, the Singapore-based investment management firm financing high-growth opportunities at the nexus of climate-tech and plastics, recycling and the circular economy, announced today that the European Investment Bank (EIB) has committed up to $20 million to the Circulate Capital Ocean Fund I-B (CCOF I-B), which invests both into disruptive innovations aligned with Circulate Capital Disrupt (CCD), the firm’s climate-tech strategy, and into the South and Southeast Asia recycling value chain, alongside the firm’s $112m Circulate Capital Ocean Fund (CCOF I). CCOF I-B is targeting a total raise of USD$80 million and is therefore in consideration with other investors, as recently disclosed by the International Finance Corporation (IFC).

European Investment Bank’s Vice-President Ricardo Mourinho Félix, said: “Preserving the health of our oceans is key to tackle the climate challenges and preserve our economic prosperity. Through the EIB’s Climate Bank Roadmap and Clean and Sustainable Ocean Programme, we are committed to investing in climate action and environmental sustainability around the World. In particular, we want to support projects aiming at reducing pollution, by recycling and re-using plastics, so that we can ensure a better future for all. I am therefore very pleased to back initiatives that make this financially viable, such as the Circulate Capital Ocean Fund I-B.”

The fund’s inaugural investments are innovators that implement solutions in the biotechnologies, sustainable fashion, and smart materials sectors as well as digitization of the recycling value chain to combat plastic waste and climate change. These enterprises include Arzeda, Circ, Phase Change Solutions, and Recykal – they represent some of today’s most cutting-edge innovations that are disrupting a cross-section of supply chains and have proven technologies and ambitions to expand in Asia where there is strong potential for financial, environmental, and social returns.

“In order to advance the circular economy and mitigate the negative effects of plastic pollution on climate change, we need to scale investment dollars into this sector immediately. The European Investment Bank’s commitment to CCOF I-B is a key indicator that the sector is ready for institutional capital,” said Rob Kaplan, CEO and Founder, Circulate Capital. “We are grateful that our investors, including global corporations, family offices, foundations, and now institutions like the EIB who are working together to bring investible solutions that foster and advance climate resilience to market standards.”

In December 2021, Circulate Capital announced the $25m second close of CCOF I-B, which followed on the June 2021 announcement of the CCD strategy and CCOF I-B fund launch. CCOF I-B is backed by international private investors including Builders Vision; Benjamin Duncan Group; Circocean Ltd; DF Impact Capital; Eden Impact; Huang Chen Foundation; Minderoo Foundation; Rumah Group; North-East Family Office and Twynam Investments Ltd.

Circulate Capital Invests in India’s Deluxe to Scale Recycling of Sachets and Multilayer Plastic Waste

April 5, 2022

Singapore, 5 April 2022 – Circulate Capital, the Singapore-based investment management firm that finances innovations, companies, and infrastructure to prevent ocean plastic and climate change by advancing the circular economy, today announced that the Circulate Capital Ocean Fund (CCOF I) is investing in Deluxe Recycling Private Limited (Deluxe). Deluxe is a leading Indian plastic recycling company that recycles challenging multilayer plastics (MLP), like sachets and Used-Beverage-Cartons (UBC) into new, valuable products, such as pallets and rickshaw seats. By creating a market for MLP waste, the company expects to divert 34,000 tons per annum of waste from incineration or landfills by 2025, helping pave the way to a circular economy in India.

Typically considered of no value and very difficult to recycle, MLP waste is one of the most polluting forms of plastic packaging and, if it is collected at all, is used for fuel, incineration, or co-processing at cement plants. Deluxe has developed a scalable ecosystem for the collection of MLP by working with and paying a network of aggregators and small material recovery facilities (MRF) to collect and sort MLP waste. The company then uses proprietary, in-house developed technology to manufacture a variety of heavy, rigid products. In 2020, the company recycled 7,100 tons of MLP, making it one of the largest organized MLP recyclers in India.

Investment from the Circulate Capital Ocean Fund will allow Deluxe to expand to three new facilities across western and southern India, increasing its capacity three-fold. The Circulate Capital Ocean Fund is the world’s first investment fund focused on ocean plastics in South and Southeast Asia, created in partnership with leading global corporations, PepsiCo, Procter & Gamble, Dow, Danone, Chanel, Unilever, The Coca-Cola Company, Chevron Phillips Chemical Company LLC and Mondēlez International. As Deluxe expands, its infrastructure can be leveraged to build a circular multilayer plastics market and accelerate the development of the sector as new technology is deployed.

Rob Kaplan, Founder and CEO of Circulate Capital, said, “Difficult-to-recycle plastics like sachets, food packing and plastic wrap have remained a global challenge in the waste management and recycling sector. Deluxe’s game-changing technology and entrepreneurial know-how has enabled the company to transform these multilayer plastics into valuable products at a scale not seen before in India. Deluxe currently supplies 90% of the recycled seat board market, which means nearly every rickshaw driver sits on a Deluxe-recycled seat. The dynamism and size of the Indian market present a huge opportunity for investment in the transition to a circular economy for plastics. Deluxe is firmly positioned at the forefront of this transformation and we’re proud to be supporting their growth.”

The problem of plastic waste, especially MLP, is increasing in India, with the country generating 9.4 million tons of plastic waste annually. Only 60% of plastic waste is being collected, with 3.8 million tons leaking into the environment every year. According to the Ellen MacArthur Foundation, the circular economy development path in India could create an annual value of ₹14 lakh crore (US$218 billion) in 2030 and ₹40 lakh crore (US$624 billion) in 2050 in comparison to the current development scenario. It could reduce greenhouse gas emissions by 44% along with significant reduction in air pollution, thus contributing to health and economic benefits for society.

Jignesh Shah, Co-founder of Deluxe said: “Our ultimate mission is to create value from waste, diverting it from incineration and landfill. We are proud to partner with Circulate Capital to scale our operations and our impact. At Deluxe, we see the potential to transform India’s MLP waste into a valuable mainstream raw material, incentivizing its collection and replacing the need to use virgin plastics.”

Since establishment, Deluxe has worked with external vendors and aggregators to provide training and development in effective waste segregation as well as offtake agreements, price premiums and better standard of living for formal and informal waste pickers. Deluxe currently employs 150 full-time employees and up to 140 contract laborers, ensuring appropriate employment arrangements and contributions to pension funds. Expansion is expected to provide employment opportunities for over 100 new recycling and waste management workers

Srichakra Becomes the First Indian Recycling Company to Receive a Positive Safety Assessment from European Food Safety Authority (EFSA)

March 10, 2022

Mumbai, March 10, 2022: Srichakra Polyplast (Srichakra), India’s first food-grade quality plastic recycling company announced today that its recycled polyethylene terephthalate (rPET) has received a positive safety assessment from the European Food Safety Authority (EFSA). The announcement comes as the Food Safety and Standards Authority of India (FSSAI) is set to approve the use of rPET for food packaging, reducing the need for virgin plastics and paving the way for a circular economy for plastics in India.

EFSA evaluates the safety of substances used in food contact materials (FCM) including active and intelligent materials. The verdict from EFSA is predicated on an in-depth assessment of processes, with a focus on the suitability of the finished polymer product for packaging purposes.

The use of rPET in FCM has been heavily restricted in several Asian regions including India until recently. The move by Indian authorities signals a policy shift that will enable bottle-to-bottle recycling and will help build local circular supply chains.

With the aim of reducing, reusing, and recycling plastic waste, the India Plastics Pact was launched in September 2021 to bring together businesses, governments and NGOs and accelerate the transformation of the plastic value chain. Srichakra’s certification is a part of this ongoing movement, showcasing the company’s commitment to turn plastic waste from a scourge into a valuable resource. Srichakra’s EFSA approval comes just months after the company announced an investment of more than US$10 million into its world-class technology to upgrade and expand recycling capabilities.

Ravindra Venkata, CEO and Co-founder of Srichakra, said, “As an organization, Srichakra is committed to offering the highest grade of recycled plastic to customers in India and international markets such as Europe and the United States. We are thrilled to receive EFSA’s positive scientific opinion which is considered as a global benchmark. We are well on our path to be the first facility in India to offer premium food-grade rPET to domestic and global markets. Moreover, FSSAI’s release of guidelines for acceptance of rPET for food applications in India is an exciting development and we are looking forward to contributing to building circular supply chains in India.”

Rob Kaplan, CEO and Founder of Circulate Capital which invested in Srichakra in December 2020, commented, “This is a tremendous achievement for Srichakra that underscores its leadership in accelerating the circular economy for plastics in India. Thanks to its technology-driven approach, the company is setting new benchmarks in the recycling and waste management industry nationwide. As a strategic investor in Srichakra through the Circulate Capital Ocean Fund, we are excited to support their growth journey.”

The Circulate Capital Ocean Fund (CCOF) is the world’s first investment fund dedicated to scaling organizations and SMEs transforming the waste management and recycling industry across South and Southeast Asia. The Fund was created in partnership with leading global corporations, including PepsiCo, Procter & Gamble, Dow, Danone, Chanel, Unilever, The Coca-Cola Company, Chevron Phillips Chemical Company LLC and Mondēlez International. Srichakra is currently in conversations with multiple global fast-moving consumer goods companies regarding offtake agreements and expects to further increase capacity across its operations.

Circulate Capital Commits to the 2X Challenge, Setting a New Standard for Gender Smart Investment in the Circular Economy for Plastics

March 3, 2022

Singapore, 3 March 2022: Circulate Capital, the emerging market investment management firm that finances innovations, companies and infrastructure that scale solutions to the plastic pollution and climate change crises, announced today it has qualified for the 2X Challenge, in recognition of its significant commitment to women’s economic empowerment. Circulate Capital’s nomination was sponsored by US International Development Finance Corporation (DFC).

Founded by the development finance institutions (DFIs) of the G7 nations to shift more capital towards investments that empower women in developing countries, the 2X Challenge aims to deploy US$15 billion for gender-lens investment by the end of 2022, an ambitious new target set in 2021 after securing more than double its initial goal of US$3 billion.

Circulate Capital and CCOF qualified as a 2X Investment across three areas:

• Leadership: Women represent 60% of Circulate Capital’s senior management, as well as 40% of the Investment Committee for CCOF.
• Employment: More than 50% of the company’s workforce are women, and the company has implemented policies and programs to address barriers to women’s quality employment across recruitment, retention and career progression.
• Investments: CCOF commits that, by the end of its investment period, at least 30% of its portfolio companies will be 2X Eligible Enterprises or 30% of its invested capital will be in 2X Eligible Enterprises.

Qualification as a 2X Eligible Enterprise requires organizations to be either women-owned or founded; have a minimum of 30% representation of women in board or senior management positions; or comprise a minimum of 30% of the workforce and institute policies to address barriers to employment.

The 2X qualification is the first milestone in Circulate Capital’s Gender Smart Investing Strategy, which has been developed with USAID via its INVEST mechanism – an initiative that mobilizes private capital for better, more sustainable development results. The Gender Smart Investing Strategy will drive performance of CCOF’s portfolio and aims to set the standard for gender-smart climate investing in emerging markets.

Circulate Capital is working with global impact investment advisory firms Sagana and Catalyst at Large to support CCOF’s portfolio companies in developing action plans to support gender awareness and inclusivity across their operations, including leadership and career progression, quality employment, and products and services that enhance women’s economic participation.

In addition, Circulate Capital will develop a guide to gender-responsive investing for the waste management and recycling sector. The guide will build on insights from Circulate Capital’s efforts to empower its portfolio companies to employ gender smart practices in their business operations and strategies, and will feature toolkits, case studies, and benchmarks for the wider sector.

Ellen Martin, Chief Impact Officer, Circulate Capital, said, “We know that inclusive investing is smart investing. Not only does having more women in decision-making positions result in better climate outcomes, but there is also a clear business case for making the waste management and recycling industry more inclusive. Circulate Capital is focused as much on improving livelihoods as it is on generating returns and solving the ocean plastic pollution issue.”

“We’re proud to be recognized by the 2X Challenge for our efforts to date and excited to launch our Gender Smart Investment Strategy, a natural evolution of our investment philosophy. With CCOF poised to deploy at least $50 million in the next two years, the Gender Smart Investing Strategy aims to strengthen the performance of our portfolio while ensuring portfolio companies are attractive and safe places for all, including women, to work and thrive. Our goal is to shift gender smart investing practices to mainstream use among institutional and commercial investors.”

There is an ever-growing body of evidence that identifies the benefits gender equality offers for economic development and addressing climate change. According to a McKinsey study, closing the gender labor gap could add $28 trillion, or 26%, to annual global GDP in 2025. In addition, research by BIS found that a 1 percentage point increase in the share of female managers has led to a 0.5 percent decrease in CO2 emissions across 2,000 listed companies in 24 industrialized economies over a 10-year period.

Suzanne Biegel, founder of Catalyst at Large and global leader in gender-smart investing, said, “Women have a critical role to play in climate change mitigation and adaptation. Women are innovators, leaders, entrepreneurs, workers and customers in climate-related fields, but they remain underrepresented in key decision-making positions and as users of capital. The 2X Challenge allows more capital to be directed to the organizations that are leading the charge in women’s empowerment in developing countries, which encompass those most at-risk from the effects of climate change. I’m pleased that Circulate Capital has been recognized as one of these leading organizations and look forward to working together to demonstrate how gender diversity supports business performance in partnership with its portfolio companies.”