Circulate Capital Fund II Raises $220M for Asia Growth

Circulate Capital, a prominent investment firm championing the circular economy, has successfully garnered $220 million in the initial closing of its second Asia-focused fund. This significant capital infusion represents over 70% of the fund's ambitious $300 million target, signaling strong investor confidence in the burgeoning sustainable supply chain sector across South and Southeast Asia.

The newly established Circulate Capital Asia II fund is strategically positioned to inject growth capital into businesses dedicated to scaling recycling and circular supply chain solutions. The investment thesis centers on critical areas such as plastic waste management, innovative packaging, and the burgeoning electronics and apparel sectors. Key operational geographies targeted for expansion include India, Indonesia, Thailand, Vietnam, the Philippines, and Malaysia, regions identified as pivotal for driving impactful environmental change.

This latest fundraising round attracted a diverse and influential cohort of global backers. Returning Limited Partners, demonstrating continued commitment to Circulate Capital's mission, include industry giants like The Coca-Cola Company, Danone, Dow, and Procter & Gamble, alongside development finance institutions such as British International Investment, Proparco, and the International Finance Corporation, and impact-focused entities like Builders Vision. The fund also welcomed a robust group of new investors, including the Emerging Markets Climate Action Fund (a collaboration between Allianz Global Investors and the European Investment Bank), Achmea Investment Management's Impact Platform, Impact Fund Denmark, SIFEM, Australian Development Investments, Stella, Clotho Family Office, Wire Group, and the Fondation Prince Albert II de Monaco.

The long-term impact envisioned by Circulate Capital through this fund is substantial. Over its ten-year investment horizon, the fund is projected to divert approximately 30 million tonnes of unmanaged waste from landfills and oceans. Furthermore, it aims to prevent over 50 million tonnes of CO2 emissions and facilitate the development of roughly 2 million tonnes of collection and recycling infrastructure. This aligns with global efforts to decarbonize supply chains and transition towards a more sustainable economic model, a trend gaining significant traction within the private equity landscape.

Building on the success of its inaugural fund, which raised $188 million and has since established nearly 900,000 tonnes of annual recycling capacity in Asia, Circulate Capital is poised for continued expansion. The firm's track record includes successful exits, such as its divestment from Indian digital waste management platform Recykal, and partial exits from portfolio companies Lucro and Srichakra Polyplast, underscoring its ability to generate financial returns while delivering environmental benefits.

Rob Kaplan, Founder and CEO of Circulate Capital, emphasized the critical role of scaling inclusive recycling systems. As highlighted by Jean-Yves Krummenacher, Global Chief Procurement Officer at Danone, such initiatives are fundamental to maintaining material value within the economy and bolstering local environmental ecosystems. The investment underscores a growing recognition among major corporations and financial institutions that sustainable practices are not only environmentally imperative but also economically advantageous, driving innovation and resilience in supply chains.