Circulate Capital has committed $150 million (₹1,425 crore) from its second fund to Indian recycling companies, building on early successes in the sector. According to reports from The Economic Times, founder Rob Kaplan announced this commitment, stating the firm is expanding its focus to critical materials like metals to diversify supply chains away from China. The fresh capital is being allocated from a $300 million fund the firm is currently raising.
The investment is backed by major corporations and development finance institutions, including Coca-Cola, Dow Chemicals, Procter and Gamble, International Finance Corporation, and Proparco. As reported by The Economic Times, Circulate Capital has raised $500 million since its inception in 2020. Kaplan, who previously served as director of sustainability at Walmart's Bentonville headquarters, focuses on backing SME and family businesses with a 10-20 year track record in recycling, which are mostly profitable with revenues between $20-30 million.
According to The Economic Times, Circulate Capital's fund has tasted success in early investments, with portfolio companies including Lucro Plastecycle, where Hindustan Unilever Ltd picked up a 14.3% stake in March last year. Another portfolio company, Srichakra, supplies recycled bottles to Coca-Cola and Pepsi. The firm's investee companies in India are currently focused on plastics recycling, but the new fund will explore other areas where recycling opportunities exist.
As reported by The Economic Times, Kaplan highlighted that the new fund would expand beyond plastics recycling into critical materials including aluminium, copper, and rare earths, where there's a massive race to extract materials outside of China. The firm sees opportunities for recovering materials already extracted from the environment that are trapped in devices or cars. Growing demand for batteries and electronics has necessitated companies to diversify their supply chains from China, making recycling a key hedge against this risk.
