Canada-headquartered venture capital fund Circular Innovation Fund has reached a first close of its $160m debut vehicle with €50m ($54.4m) from cosmetics producer L’Oreal.
Circular Innovation Fund was formed as a joint venture by Canada-based impact investment firm Cycle Capital and Demeter, a France-headquartered VC firm concentrating on startups developing technologies centred on the forthcoming ecological transition.
The fund is targeting companies operating in the circular economy space and will invest in those working on circular business models as well as those in areas like advanced materials, circular packaging, ecological processes and design methods, and logistics, recycling and waste innovations technology.
In addition to its direct investments, Circular Innovation Fund is sponsoring a startup accelerator in partnership with Cycle Capital’s open innovation platform, Cycle Momentum, which will operate across Europe, North America and Asia until 2025.
L’Oréal provided its share of the capital through its sustainability-focused L’Oréal for the Future initiative, and Circular Innovation Fund’s limited partners also include fuel technology producer Axens and family offices Haltra and Claridge, in addition to unnamed individuals.
The first two investments for the fund consist of contributions to circular economy-focused investment firm Closed Loop Partners’ second fund, Closed Loop Venture Fund II, and European Circular Bioeconomy Fund, which makes similar investments at growth stage.
Alexandra Palt, L’Oréal’s chief corporate responsibility officer, said: “At L’Oréal we believe that impact investment is a powerful tool to tackle the biggest environmental issues and accelerate the necessary green transition.
“With the Circular Innovation Fund, we are joining forces with other committed actors to scale circular and profitable solutions for sustainable growth.”
Axens’ chairman and chief executive, Jean Sentenac, added: “Axens is deeply involved in the development of advanced processes and solutions for the circular economy of goods and materials, including plastics – with our Rewind family processes – and metals.
“In order to accelerate the emergence of a circular economy worldwide, innovation is required all along the value chain of those goods and materials. The Circular Innovation Fund, with renowned partners coming from different horizons, will be a powerful tool to support this innovation growth, and we, at Axens, are glad to be part of it.”
