As 2021 draws to an end, Closed Loop Partners’ venture capital group — the Closed Loop Ventures Group — reports that it has closed its Venture Fund II, which is backed by investors including Microsoft and Autodesk Foundation. An executive for Closed Loop Partners said the investment arm surpassed its $50 million goal for the fund but did not disclose by how much.
"The fact that [the fund is] oversubscribed through our $50 million target is indicative of where the industry is going and the demand not just from investors, but also from the broader macro environment that recognizes that circularity is part of the industry of the future and that we're all working on moving together," said Danielle Joseph, managing director at Closed Loop Partners.
With the fund closed, the group is shifting its attention to investing in the next generation of circular companies and supporting their founders, Joseph said.
Closed Loop Ventures Group invests in seed and pre-seed stage companies that are focused on the development of the circular economy.
The fact that [the fund is] oversubscribed through our $50 million target is indicative of where the industry is going and the demand not just from investors.
That was the same approach for Venture Fund I, which has 19 portfolio companies representative of the same sectors that Closed Loop Partners is seeking to fund with the second fund — plastics and packaging, food and agriculture, fashion and apparel, and transparency and logistics.
Algramo, a Chilean startup that is addressing the "poverty tax" some families pay for everyday goods — like laundry detergent — by making reuse accessible, Thrilling, a resale startup that partners with thrift and vintage shops to increase their reach using an online marketplace, and The Renewal Workshop, which partners with brands and retailers to give garments a second life through resale, are on the list of companies that received funding from the first venture fund.
"Many of them are moving on to their Series A round, some of them on to their series B or later. We're excited to be growing with them," Joseph said.
In addition to the monetary funding, Closed Loop Partners also leverages the insight and expertise of its investors — and the challenges that they face — to make better investment decisions.
"Our investor mix is actually, I think, a unique combination of individual investors, family offices and corporate sponsors who have invested directly into the fund vehicle as traditional limited partners," Joseph said.
Contributors to the fund include the Autodesk Foundation, the philanthropic arm of Autodesk. The foundation also contributed to Venture Fund I.
"We are proud to have been an early investor of the Closed Loop Ventures Group and are doubling down on our commitment to help scale the emerging design and manufacturing approaches that make end-to-end circularity possible," said Joe Speicher, executive director of the Autodesk Foundation and head of sustainability at Autodesk, in a statement.
Another big-name funder is Microsoft.
"Our investment in the Ventures Group’s Fund II is a key part of our efforts toward our 2030 zero waste goals, driven by the innovators and emerging companies that help make this possible," said Brandon Middaugh of Microsoft’s Climate Innovation Fund, an investor in Closed Loop Partners’ funds, in a statement.
What we want to see is that we are not the only dedicated fund in the space, as we are today, to invest in these early stage circular economy companies.
Fund II has already invested in 10 companies. There’s griin, an Israel-based startup focused on on-demand zero-pollution coffee roasting, and Partsimony, which has the goal of building cognitive supply chains and increasing efficiencies for hardware companies and manufacturers.
There’s also ucrop.it, an app-based platform that has the goal of helping farmers who use various sustainability practices receive better prices from corporate customers. When farmers share their crop cycle information from their operations on the platform, prospective customers are able to view it in the form of a blockchain-recorded log, which helps them vet the farmers' sustainability practices and offer better payments. Dimpora, which develops membranes to waterproof clothing that do not contain per- and poly-fluorinated chemicals (PFCS) that are commonly found in winter gear and have been linked to human health risks, also received funding from the ventures group.
In 2022, the fund plans to make more investments (Joseph noted that companies interested in funding are always welcome to apply on the website) and wants to see even more investment in companies focused on building a circular economy.
"What we want to see is that we are not the only dedicated fund in the space, as we are today, to invest in these early-stage circular economy companies," Joseph said. "But rather that we are inviting the broader venture ecosystem to participate alongside us, and independently of us, to really accelerate the transition from this linear economy to a more circular one."