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Novoloop and Closed Loop Partners Bank on Waste as a Win

Closed Loop Partners, an investment firm focused on building the circular economy, has closed the final round of funding for its private equity wing, the Closed Loop Leadership Fund. The total of the investment round has not been disclosed.

The firm says that the Closed Loop Leadership Fund portfolio now manages more than $200 million in total assets and helps keep more than 920,000 tons of recycled materials in play per year. The fund invests in best-in-class circular business models fundamental to keeping plastics and packaging, food and organics, electronics and textiles out of landfills and within a circular system.

“Since its launch in 2019, the Closed Loop Leadership Fund, our buyout strategy at Closed Loop Partners, has made significant strides acquiring and building businesses at the forefront of developing circular supply chains at scale,” Closed Loop Partners founding CEO Ron Gonen said in a statement. “This final close of the Fund, which includes a number of leading investors, is a milestone for the development of the circular economy.”

The fund’s strategy centers on scaling business models that advance circular supply chains. The Closed Loop Leadership Fund’s first investment was acquiring Balcones Resources, a family-owned recycling business based in Austin, Texas.

In January, the Leadership Fund led a consortium of investors to acquire the majority stake of Sims Municipal Recycling (SMR), which manages New York City’s municipal recycling contract, the largest in North America. SMR operates three recycling facilities in the New York metropolitan area and one facility in Florida.

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At the time of the SMR acquisition, Closed Loop Partners said its investment was expected to further modernize circular economy infrastructure and service in the New York metro and expand the company into new markets.

Lego owner Kirkbi, funds and accounts managed by BlackRock, and Realdania’s investment arm are the newest investors in the fund. They join existing investors Nuveen; Nestlé; Microsoft; PepsiCo; Unilever; SK Geo Centric Co., Ltd.; donor advised funds and a series of global family offices in Closed Loop Partners’ buyout investment strategy focused on building circular economy platforms across sectors.

“Transitioning to a circular economy represents a capital shift of $4.5 trillion by 2030, according to research. There are strong tailwinds of consumer demand, cost-savings and resiliency driving the shift away from a linear economy,” Lynn Baranski, global head of investments at BlackRock Private Equity Partners, said. “Closed Loop Partners has the expertise, thought leadership and differentiated execution ability to help capture the opportunity of this shift and drive positive economic, social and environmental outcomes through its investments.”

The Leadership Fund is the largest fund to date for Closed Loop Partners, which has invested capital into businesses and innovations dedicated to reducing waste and greenhouse gas emissions via materials innovation, advanced recycling technologies, supply chain optimization and landfill diversion.

Closed Loop Partners now manages more than $475 million and has made over 60 investments since its inception, including circular textile innovator Evrnu and The Renewal Workshop, which repairs and prepares merchandise for resale. To date, Closed Loop Partners says its investments have kept 3.6 million tons of materials in circulation and avoided 6.8 million metric tons of greenhouse gas emissions.

Novoloop

Closed Loop isn’t the only company dedicated to the circular economy that to attract new funding. Advanced upcycling startup Novoloop is expanding on its initially announced February Series A funding round to $21 million through an oversubscribed extension led by Mistletoe Singapore and Hanwha Solutions.

This $10 million round nearly doubles Novoloop’s first raise of $11 million, which sparked the additional investor interest, the company said.

Novoloop will use the capital to begin developing industrial capabilities, including scaling up pilot production to make its Oistre product more readily available for customers in footwear, apparel, sporting goods, automotive and electronics. Oistre is branded as the world’s only thermoplastic polyurethane (TPU) made from post-consumer waste that matches the performance of TPUs derived from petrochemicals.

The upcycling startup will also use the funding to set up a feedstock pretreatment unit to assess the quality of post-consumer plastic waste from material recovery sources.

Investors include Valo Ventures’ anchor LP Fortum, a publicly traded clean energy and resource efficiency solution provider headquartered in Finland; climate technology investor SOSV; Drive Catalyst, the corporate venture arm of the polyester and textile recycling firm Far Eastern Group; and additional investors Alante Capital and S CAP.

“This round brings together mission-driven financial investors and industry strategics who believe in our vision of a circular economy for plastics,” Novoloop CEO Miranda Wang said. “We’re thrilled to make that vision a reality by leveraging their access to resources and markets around the world.”

Novoloop uses its proprietary Accelerated Thermal Oxidative Decomposition (ATOD) technology to make high-performance chemicals and materials from polyethylene, which is a commonly used yet least recycled plastic.

“Leading this round was obvious,” Mistletoe founder Taizo Son added. “After seeing Novoloop emerge from R&D with a product that solves real world problems, Mistletoe is a firm believer in the financial and environmental impact the company will create. We’re already looking at ways to amplify this impact in places that really need it like Asian countries where the economy is fast-growing and the waste problem is serious.”

Other Series A investors announced earlier this year include Envisioning Partners, Bemis Associates, and Time Ventures.