In your own words, tell us about your composting facility and process.  

Syed Dong, Black Earth: Black Earth Compost is a curbside compost service for households, businesses, municipalities and schools in Eastern Massachusetts, Rhode Island and New Hampshire, as well as a compost manufacturer. As a site foreman, I operate a hybrid system of aerated static piles and windrows. This is a system of composting that involves forcing air through the piles from pipes underneath then periodically turning piles of compost––also known as windrows. I encourage forced aeration when possible, as it allows for more vector control and has faster processing times than traditional windrow. We accept both food and compostable plastic and fiber products. All materials get tipped inside a receiving building with below grade aeration and blended right away with carbon. After a week or two, it goes onto an above grade pipe system for six weeks then onto curing windrows for two months.  

Nathan Reinbold, Glacial Ridge: Glacial Ridge Composting Facility is a regional multi-county composting operation in Minnesota, owned and operated by Pope/Douglas Solid Waste Management. We utilize a covered aerated static pile system designed by Engineered Compost Systems (ECS) to manage the organics stream. We built the facility so that it can be expanded over time to meet a growing need. About 6,500 tons per year of source-separated organics are anticipated to be processed once the composting facility has been fully built out. Partnerships were formed with Pope, Douglas, Grant, Stevens and Otter Tail counties to utilize the facility. Finished compost is sold to landscapers and for youth and civic fundraiser events––called Plate to Garden compost! 

Why did you decide to accept food scraps and compostable packaging at your facility?  

Black Earth: Accepting both food and compostable products enables us to further address the organics waste crisis that is looming over the nation. Food is a valuable resource that must be recovered, and accepting compostable products helps us recover more of it. By processing both food and compostable products, we can also be a resource to the community by offering material that builds quality soil. 

Glacial Ridge: We conduct facility waste composition studies every 5 years as part of our permit process. From this study, we found that a significant portion of our delivered regional multi-county municipal solid waste consisted of food scraps and compostable fiber. We decided to develop an organics collection pilot in 2017, and it has now grown to include a number of regional counties participating with a full-scale commercial composting facility that opened in 2022. 

How have you adapted or improved your operations to make food-contact compostable packaging work for your process, while still creating a high-quality finished compost? 

Black Earth: There are a lot of great benefits that can be unlocked by accepting compostable products, but more work needs to be done so that non-compostable products don’t also end up in our facility.  Currently, machines play a role in controlling the contamination that comes in from conventional plastic products that end up in our facilities because they look like compostable products.* Adding a vacuum has been helpful in combating this issue.  

Glacial Ridge: We found that the covered aerated static pile composting process to be very user-friendly for managing the compostable packaging part of the organics stream. All composting facilities in Minnesota adhere to and accept only foodservice packaging that is BPI-certified compostable.** This helps to take the guesswork out of being able to accept compostable packaging and to communicate to customers to only use BPI-certified packaging in order to reduce or eliminate contamination and additional processing costs or processes. 

*The Composting Consortium’s research shows that contamination is a challenge for most composters, regardless of their material acceptance policies, business model or size. Moreover, conventional plastic constitutes 85% of the incoming contamination that composters receive—highlighting how important it is to rid look-alikes from the system. For more details, read our report here.  

**Glacial Ridge Composting Facility accepts BPI-certified compostable packaging. The Biodegradable Products Institute (BPI) is a leading certification body, alongside other certification bodies in the composting industry, such as the Compost Manufacturing Alliance.  

How has accepting food-contact compostable packaging brought value to your business and your community?  

Black Earth: So many stakeholders need to be involved and aligned to successfully accept and process certified compostable products that bring value to the composting stream. Since Black Earth Composting is a collection and hauling company, as well as a compost manufacturer, accepting compostable bin liners has made the job of servicing bins easy for our customers and truck drivers. This opens the door to folks that previously saw separating food scraps as messy. Also, this leads to driver retention by making the job a little easier. 

Glacial Ridge: Accepting feedstocks, over and beyond only food scraps and napkins, allows Glacial Ridge to be customer and user-friendly. Accepting only BPI-certified compostable packaging allows easier adoption of organics recycling programs and opportunities to divert more food scraps from the waste stream. We also administer a zero waste events program where we connect BPI-compostable packaging and specialized color coded event bins, that are monitored by volunteer/VTO ‘Waste Warriors’, with large scale and community-based events to divert food scraps from the waste stream in a very visible and educational manner to create additional buy-in and acceptance from stakeholders. 

Any words of advice to fellow composters who are considering accepting food scraps and compostable packaging?  

Black Earth: Don’t be afraid of compostable packaging. Education goes a long way and unlocks new opportunities for the composting business and for broader organics circulation! Start small and educate, educate, educate. While it comes with challenges now, compostable products will continue to play a growing role in replacing single-use conventional plastic and have the potential to replace much of the current contamination we see, and bring in more food to composting facilities. Get ready for it. 

Glacial Ridge: I recommend that composters work closely with their state chapter of the USCC. In 2023, the Minnesota Composting Council worked to pass a compostable labeling bill. The purpose of this new law was to reduce misleading product claims, reduce confusion among residents, food establishments and more on what products are accepted for composting. The overarching intention was to reduce contamination at compost facilities resulting in them manufacturing a cleaner, more sellable product. We also recommend utilizing professionally-designed color-coded educational materials to be used on organics carts, dumpsters, roll-offs and inside intermediate collection bins––both public-facing and back of house––that include mention of BPI certification for compostable packaging as the gold standard to reduce confusion and lower contamination concerns. 

In the last mile of today’s cold chain, standard single-use plastic encased gel packs are among the biggest sources of waste. With a lack of recovery pathways, the vast majority are discarded in landfill or end up contaminating recycling streams. The challenge lies in what the gel packs are made of: often single-use, non-curbside recyclable low-density polyethylene (LDPE), and a petroleum derivative for the gel.

Yet the growth of industries that are dependent on the cold chain––such as meal kit delivery services––are now facing upcoming Extended Producer Responsibility and “Truth in Labeling” regulations. With these shifts comes an increasing demand for less wasteful alternatives, and a new wave of sustainable cold chain solutions for perishables.

Enter Minus Works, a manufacturing and technology company developing circular solutions to shift the cold chain from linear to circular systems. In 2023, as the Series A startup was building products to reduce waste in the shipping of perishables, clear market demand brought the company to their next phase of growth. But to support this growth and disrupt the cold chain industry, the company required capital and a platform to scale its solution and impact.

Closed Loop Partners’ catalytic private credit group, the Closed Loop Infrastructure Group, having invested heavily in solutions across material collection, sortation, processing, end manufacturing and enabling technology, saw a key opportunity to advance circularity for this industry. Through its platform––an investment firm, innovation center and operating group––Closed Loop Partners is positioned to provide capital, expertise and access to an extensive network spanning entrepreneurs, industry experts, global companies, financial institutions and municipalities. The Closed Loop Infrastructure Group, backed by several of the world’s largest retailers, corporate foundations, industry associations, materials science and consumer goods companies, deployed growth capital––particularly, catalytic debt financing––to accelerate Minus Works’ growth.

Minus Works’ solution aligned with the Infrastructure Group’s mandate. Their alternative gel packs, the BRiQ smarter coolant, used recycled content paper and a compostable gel interior, serving as a non-toxic, circular alternative to single-use plastic wrapped gel packs. By using a recycled fiber casing for their product, Minus Works created a new end market for recycled paper, driving the demand pull-through needed to improve the quality and quantity of materials kept in circulation across North America. Additionally, with freezing co-located at the gel manufacturing site, the company also reduces the required production space by 80%, in turn resulting in lower costs and emissions associated with transportation.

Following its investment, Closed Loop Partners’ Infrastructure Group worked closely with Minus Works, exploring opportunities to refine the product and ensure its circularity at scale. Through its connection to Closed Loop Partners’ larger network, Minus Works was also able to identify alternative financing options for growth that could complement the debt financing they received from Closed Loop Partners.

With funding from Closed Loop Partners and other strategic investors, Minus Works positioned themselves for scale. One year later in October 2024, Minus Works announced their acquisition by Nordic Cold Chain Solutions, a leading provider of cold chain solutions, to further scale their technology and integrate their business within a larger platform of cold chain solutions. This acquisition represents not only a significant milestone in Minus Works’ growth and the important role of catalytic capital––but also signals the inherent value of businesses focusing on circular economy.

As more industries and supply chains demand greater resource efficiency and solutions that reduce waste and emissions, circular economy infrastructure and technologies will be pivotal. Catalytic capital will continue to play an important role in the growth of circular economy solutions. Its ability to accelerate and de-risk the development of high-impact projects and companies opens opportunities to attract additional forms of traditional financing that can bolster growth.

Closed Loop Partners’ Infrastructure Group, building on Closed Loop Partners’ 10-year track record, continues to deploy a flexible mix of financing solutions––such as secured and unsecured loans and mezzanine debt, or catalytic equity financing––supporting companies, cities and projects that need access to large pools of capital. Through a platform of support, we aim to transform industries, keep more materials in circulation and accelerate the transition to a circular economy.

To learn more about Closed Loop Partners’ Infrastructure Group and apply for funding, visit here.

Disclosure

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Capital Management or any company in which Closed Loop Capital Management or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Closed Loop Capital Management does not utilize its website to provide investment or other advice, and nothing contained herein constitutes a comprehensive or complete statement of the matters discussed or the law relating thereto. Information provided reflects Closed Loop Capital Management’s views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision.

Executive endorsements of Closed Loop Capital Management are for illustrative purposes, designed to attract business development contacts, and should not be construed as a client or investor testimonial of Closed Loop Capital Management’s investment advisory services. All such endorsements are from current or former portfolio company leadership about Closed Loop Capital Management’s ability to provide services to their companies. Closed Loop Capital Management has not, directly or indirectly, paid any compensation to such individuals for their endorsements.

The Case Studies described on the Website are included as representative transactions to demonstrate assets to which Closed Loop Capital Management provides capital, however, are not representative of all Closed Loop Capital Management investments and are not necessarily reflective of overall results of any of Closed Loop Capital Management’s businesses. Investments in other businesses may have materially different results. Not all Closed Loop Capital Management investments had or will have similar characteristics or experiences as those included herein.

Certain information on this Website may contain forward-looking statements, which are subject to risks and uncertainties and speak only as of the date on which they are made. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. Closed Loop Capital Management undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Past performance is not indicative of future results; no representation is being made that any investment or transaction will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

Advancing electronics circularity has long been a core part of our investment focus at Closed Loop Partners. That has only accelerated as state and federal governments have increased focus on domestic manufacturing for electronics, right-to-repair laws and domestic sourcing of metals and minerals needed for the energy transition.

For servers specifically, we’re caught in between accelerated market growth and simultaneous accelerated obsolescence of these devices. An 8.3% compound annual growth rate is expected to result in a market size of $230B by 2034––at the same time, more existing technology continues to fall obsolete with generative AI dramatically driving up computing needs. With nearly 14 billion servers shipped in 2023, and the average life expectancy of a server down to three to four years,  processing and repurposing these assets for their next life in lower computational applications is critical.

In the discussion that follows, Rob Lawson-Shanks, Co-founder and CEO of Closed Loop Ventures Group portfolio company Molg, speaks with Aly Bryan, Investor on the Closed Loop Ventures team at Closed Loop Partners, about how Molg is supporting hyper-scalers––large-scale data centers that provide cloud computing and storage services to organizations and individuals––and their partners to improve recovery and utilization of these assets, ultimately making circularity stick in the electronics industry.

Rob: My name is Rob Lawson-Shanks and I’m the Co-founder and CEO of Molg.

Aly: And I’m Aly Bryan, an investor on the Closed Loop Ventures team at Closed Loop Partners.  I also have the distinct pleasure of serving on Molg’s Board of Directors. Rob, can you please start us off by sharing a bit about what you’re building at Molg?

Rob: At Molg, we support hyper-scalers, electronics manufacturers and their partners in advancing a circular economy for electronics––focusing today on servers and laptops, two key devices with increasing opportunity to recover materials at scale.

Aly: Why do you think circular economy is important to your partners?

Rob: Our customers are experiencing tremendous demand for computing ability––resulting in significant growth of their existing data center footprints. In many cases, our partners are growing so fast that they’re outpacing the supply of the very materials they need to bring new assets online. Molg helps our partners recover and reuse legacy assets––like CPUs, memory cards and more––that otherwise would need to be purchased new, helping to get new data centers online faster and saving hyper-scalers money in the process.

Aly: Today, Rob and I will explore how to identify strong partners and then work with them to scale, where grant dollars can help to support growth of the business, and ultimately tackle how he thinks we can make circularity stick in the electronics industry. Let’s get started!

On Identifying Strong Partners

Aly: Molg has a partnership with Sims Lifecycle Services as well as other hyper-scalers, and you have worked with Dell and other consumer electronics companies in the past few years. How did you go about identifying the right partners within each of those organizations? What makes them strong partners for you as you look to scale?

Rob: When identifying the right partners, we look for alignment in three key areas: shared mission, complementary capabilities and a commitment to innovation. For us, it’s not just about who can provide access to assets or resources but who is genuinely invested in advancing the circular economy.

Take Sims Lifecycle Services, for example. They’re at the forefront of electronics recycling and resource recovery. Their deep expertise and established infrastructure are critical for closing the loop on materials. It’s this operational strength that makes them an ideal partner for us to deploy our Microfactories with. They bring the logistical muscle, and we bring the cutting-edge technology to recover and repurpose high-value components efficiently, creating a seamless integration that amplifies impact.

On Sources of Funding

Aly: I’ve always been impressed with the way your team has balanced commercial arrangements with government funding, including your recently announced $5 million grant from the Department of Energy. How do you think about the role of grant dollars in supporting the growth of the business?

Rob: We’re in a once-in-a-generation moment where the government is investing unprecedented funding into reshaping industrial policy, bringing supply chains back to the U.S., and creating powerful opportunities for resilience and circularity in the process.

This $5 million grant directly accelerates our ability to scale our Microfactory technology, allowing us to create meaningful contributions to circularity at a much faster pace.

What’s even more exciting is that this project is being executed in partnership with several of our commercial partners, which means the impact of the Department of Energy’s investment is amplified through real-world deployments. It’s a collaborative approach that not only validates our technology but also sets the foundation for a more sustainable and resilient electronics supply chain in the U.S.

Aly: Earlier this year, you closed a $5.5 million Series Seed with participation from Amazon Climate Pledge Fund, ABB Ventures, Overture VC, Elemental Impact and of course us at Closed Loop Partners. What will this new capital help unlock for the business?

Rob: First, I want to extend a huge thank you to Closed Loop Partners’ Ventures Group for leading our Series Seed round and for your continued support. It’s been instrumental in getting us to this point. The funding from you and our incredible partners allows us to meet the rapidly growing demand from our customers who are increasingly prioritizing circularity.

The need for circular solutions is accelerating at an incredible pace, and the scale of the problem requires companies like ours to grow quickly to support this demand. For us, it was crucial to have backing from mission-aligned partners like Closed Loop Partners, who see not only the massive financial opportunity but also the transformative potential for creating circular supply chains.

On Commercial Contracts

Aly: I’d be remiss not to ask on behalf of all the other circular economy founders out there working to get their first commercial contracts over the line. What advice would you have for those founders on how to most effectively navigate those conversations?

Rob: These commercial partnerships are absolutely critical because the biggest impact on circularity comes from working with large companies that operate at a significant scale. To make meaningful change, you need to engage with Fortune 100 and 500 companies where your solutions can have the most transformative effect.

One piece of advice I would offer is to truly understand the mission and values of your potential partners. Early on, I found it invaluable to dig into their ESG reports and public statements to see what they’re prioritizing and where your solutions can align. It’s about finding that overlap between your goals and theirs, which often forms the basis of a strong partnership.

It’s also important to recognize that circularity is challenging and it’s a journey—there’s no single solution that will instantly make a company circular. It takes patience, empathy and an iterative approach. You have to be willing to work closely with your partners, especially understanding that it’s a give-and-take process as you incrementally build towards the larger, more holistic systems we all envision.

For me, it’s always been about approaching these contracts from a partnership mindset. Instead of just selling a product, focus on how you can co-create value and support each other through the inevitable challenges. That collaborative spirit is what will drive real progress and help you navigate those early conversations effectively.

On Making Circularity Stick

Aly: Last question! How can we make circularity stick in the electronics industry?

Rob: Well, first off, we could start by making things less sticky by not using glue and adhesives in electronic design! But on a more serious note, it’s really about forming strong partnerships across the entire ecosystem and pushing each other in our respective roles to make circularity the default way of doing things. We need manufacturers, users, recovery partners and second-life users all working together, challenging what’s possible, and continuously raising the bar on circularity until it’s just how we operate as an industry.

“Making Circularity Stick” is a collection of interviews with founders across the Closed Loop Ventures Group portfolio sharing their experiences of making circularity stick across industries. If you’re interested in connecting with the founders sharing their stories, please reach out to Aly Bryan at [email protected].

Disclosure

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Capital Management or any company in which Closed Loop Capital Management or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Closed Loop Capital Management does not utilize its website to provide investment or other advice, and nothing contained herein constitutes a comprehensive or complete statement of the matters discussed or the law relating thereto. Information provided reflects Closed Loop Capital Management’s views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision.

Executive endorsements of Closed Loop Capital Management are for illustrative purposes, designed to attract business development contacts, and should not be construed as a client or investor testimonial of Closed Loop Capital Management’s investment advisory services. All such endorsements are from current or former portfolio company leadership about Closed Loop Capital Management’s ability to provide services to their companies. Closed Loop Capital Management has not, directly or indirectly, paid any compensation to such individuals for their endorsements.

The Case Studies described on the Website are included as representative transactions to demonstrate assets to which Closed Loop Capital Management provides capital, however, are not representative of all Closed Loop Capital Management investments and are not necessarily reflective of overall results of any of Closed Loop Capital Management’s businesses. Investments in other businesses may have materially different results. Not all Closed Loop Capital Management investments had or will have similar characteristics or experiences as those included herein.

Certain information on this Website may contain forward-looking statements, which are subject to risks and uncertainties and speak only as of the date on which they are made. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. Closed Loop Capital Management undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Past performance is not indicative of future results; no representation is being made that any investment or transaction will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

What is your organization’s role in the composting industry?  

Compost Manufacturing Alliance (CMA):  CMA field tests compostable packaging disintegration and reviews acceptance criteria for some of the largest composting facilities in the U.S. and Canada. Our published list of certified and accepted compostable products includes a significant percentage of compostables throughout North America, with over 5,000 unique, individual products certified or approved from hundreds of global manufacturers. CMA originated from composter-led efforts to address the challenge of some certified compostable packaging not breaking down in the compost process. In 2007, Cedar Grove started a field testing program to develop lists of accepted compostables for its municipal partners and commercial clients, which became nationally recognized. In 2016, CMA’s founder, Susan Thoman, expanded Cedar Grove’s program nationwide, partnering with five large compost facilities. Today, CMA aims to ensure compostable packaging disintegrates properly, protecting composter and packaging manufacturers’ investments and preventing landfill waste.   

Compostable Field Testing Program (CFTP): CFTP supports composters with methods and test kits to field test compostable product disintegration at their sites. We then collect and open source the resulting data, including both product disintegration and compost operating conditions. As an international, nonprofit research platform, we look to understand how compostable products break down in real-world conditions. Founded in 2016 by the Compost Research & Education Foundation and BSIbio, our origins begin in 2013 working with university partners to refine and pilot the US Composting Council’s (USCC’s) original “mesh bag” field test method and create a new “dose” method for sites where a bag won’t work.  

Composting Consortium (CC): The Composting Consortium, managed by Closed Loop Partners’ Center for the Circular Economy, conducts in-market tests and in-depth research to support the industry in advancing composting infrastructure and the recovery and processing of food-contact compostable packaging and food scraps in the U.S.  We launched in 2021, bringing together leading voices across the composting and compostable packaging value chain––from the world’s leading brands to best-in-class composters running the operations on the ground.  

Why is field testing compostable packaging important? 

CFTP: Composters can only accept compostable packaging if they know that these materials will truly break down and not negatively impact their end product––healthy compost! Biodegradation testing, which happens in a lab environment, is important. It proves that an item is really getting converted at a molecular level by microbial activity. But disintegration testing to see compostable products visibly breaking down is equally important. Field testing compostable packaging is a way to bridge between lab results and real-world disintegration in actual industrial and commercial settings. 

CMA: It’s critical to building trust in the composting industry. Many of today’s largest facilities must use technology that works for an evolving list of feedstocks, including post-consumer food scraps. These are different systems than what was used in the beginning years of yard waste and pre-consumer food scrap composting. Commercial composting and compostable packaging have evolved significantly and are continually improving. It’s true that lab standards are now only one step in confirming product safety and disintegration in various composting systems. Products must be proven to break down in facilities to ensure they are not treated as contaminants and end up in landfills. 

 CC: Compostable packaging is a promising innovation for diverting food waste from landfills to composting facilities, but to be successful, infrastructure must be willing and able to process these materials. Prior to 2024, limited public information existed on the performance of compostable packaging, and we’re glad to see that is changing. Data from field testing replaces anecdotes with data that can drive discussions, decisions and policymaking that will shape a more resilient future for the composting and compostable packaging industries.

What are some of your key findings thus far? 

CMA: Contrary to common belief, biopolymers generally disintegrate well in composting. Fiber-based products do not disintegrate as well as biopolymers overall, although compost manufacturers are more comfortable taking in fibers because bioplastics often resemble traditional plastics and are often sorted into the organics bin by mistake. We are also narrowing down the composting conditions that most affect product disintegration. While time is certainly a factor, it is not necessarily conclusive. The interaction between time, moisture, carbon to nitrogen ratio and agitation is complex and dynamic. Our data suggests that no single variable can be considered the key to successfully breaking down compostable products. Each variable within this set of acceptable conditions––such as moisture, carbon to nitrogen, bulk density––affects other variables.   

CC: Our report features our top 10 findings, and to be even more succinct, we can boil it down to three key takeaways. First, certified food-contact compostable packaging breaks down effectively at commercial composting facilities that meet reasonable operating parameters––such as moisture, water and temperature––as defined by the Composting Handbook. We collaborated with composters to collect daily and weekly pile readings within these parameters. Second, compostable plastic and fiber packaging met field-testing thresholds for disintegration, achieving 80% and 90% thresholds at the material category level, as per CMA’s standards. Lastly, fiber packaging disintegration improves with mechanical or manual agitation and consistent moisture levels above 50%. For more details, read our report here.  

CFTP: Our data shows us that composter acceptance is more complex than just whether a material will disintegrate or not––contamination mitigation, and the role of materials in the composting process play an important part. The results for fiber products always surprise folks; both lined and unlined fiber products––such as “food-soiled paper”––don’t tend to break down as quickly as we might expect, despite their widespread acceptance. On the other hand, biopolymers consistently prove to break down better than what is anecdotally reported in the field. In either case, tests across different technologies––like windrow and aerated static pile––have shown that the operating conditions have to be right for the products to break down. Temperature and moisture have the most significant impacts. The right conditions vary by material, and these conditions apply regardless of technology. Our new online Results Dashboard allows visitors to view how different materials perform, in different facility types and under different conditions.  

Where have you seen opportunities for further collaboration or joint work?  

CMA: Research in this space is vitally important, but funding for research is scant. Pooling resources to fund, design and conduct research can move the composting and compostable products industries forward faster and more efficiently than any one entity can alone. Conversations, like this one, can shed light on different stakeholders’ perspectives and where we can find common ground. From that common ground, we can each use our own platforms to dispel misperceptions that often lead to bad policy and thwart true progress.  

CFTP: Although disintegration trends appear similar across data sets, there are tangible differences in methodology between different testing groups that could benefit from standardization. Creating a collaborative industry standard for field testing could result in more reliable testing and more comparable data between tests.   We’ve been collaborating to standardize methods since 2021 under ASTM International, one body which published lab-based disintegration and compostability testing and labeling standards in the 1990s.   

CC: Given the key insights that are similar across our organizations, working together to educate composters, policymakers, and packaging manufacturers and brands on the topic of field testing can help expand end-of-life options for compostable materials and close the loop on food waste. We’re really proud of the way our teams are collaborating already! We are all contributing to the development of an ASTM field testing standard, and our team will donate data to developing this method, like we have to CFTP for the launch of its open-source database.  

Any final thoughts? 

CFTP: Compost operations are as unique as fingerprints, and even a single composter using the same technology will experience a range of operating conditions––such as temperature and moisture––season-to-season or pile-to-pile. Pursuing research on field testing results that correlate to operating conditions is going to help move the needle on understanding compostable packaging, and help composters feel confident in accepting these products, without having to test every product themselves. Importantly, field testing alone can’t solve the challenges facing the circular economy for food scraps and compostable packaging. An aligned and science-based approach that ties policy, systems and technology together is essential, and it’s for this that the CFTP’s non-profit and open-source approach is designed.​     ​ 

CMA: CMA continues to hold a space to connect product designers with compost manufacturers. When we collectively work manufacturer-to-manufacturer, we have a much more efficient way to address the disintegration performance of materials in real world systems. Working together, we can explore the relationship between product constituencies and pile science. Continued collaboration around field disintegration testing and settling on a method, and then a standard, within the ASTM D34 committee, can harmonize research efforts and provide all stakeholders with greater clarity and focus for the future.  

CC: Our team has launched several new programs to engage packaging manufacturers, composters and municipalities (cities and counties) to scale infrastructure, and we welcome a conversation with these groups about the results of our disintegration study. If you want to learn more about how we’re supporting the scale up of composting infrastructure, please reach out to Caroline Barry at [email protected].  

Learn more about how field testing works below! 

How do you test the disintegration of certified compostable packaging?  

CMA: The “mesh bag” method has been central to CMA’s composter-centered testing for nearly 20 years. Samples are marked, placed in mesh bags, and layered within a freshly made compost pile at a commercial facility. What makes our testing distinct is that CMA retrieves the mesh bags at the end of the active cycle, as opposed to the end of the curing phase. This means that the bags are extracted, cooled and dried, then our field technicians sift each bag and samples are sent to the lab for further processing. CMA evaluates visual disintegration, which aligns to compost manufacturers’ concerns about visual contamination in their end-product. Our thresholds to “pass” CMA’s field-testing criteria for certification are based on composters’ perspectives. Fiber-based remnants in finished compost are generally considered less problematic than plastic remnants because fiber-based remnants will often continue to disintegrate after active composting, just as they do in ambient conditions. Compostable biopolymers, on the other hand, may or may not continue to disintegrate after active composting and can look like conventional plastic in the finished product. Thus, compostable biopolymers must show >90% disintegration to pass while fiber-based products must show >80% disintegration.  

CC: Our disintegration study tested over 23,000 units of fiber and compostable plastic packaging, making it the largest field test of certified compostable packaging in North America. All products and packaging tested in our pilot were either BPI-certified or in the process of certification. This intentional choice ensured no harmful chemicals, such as PFAS, were deliberately introduced into the composting process.  We trialed both the mesh bag method and the dose method.  Disintegration was measured by percentage reduction in weight and surface area at Day ~47 and at the end of the curing phase. The compostable packaging remained in the compost piles for 49 to 94 days, depending on the facility’s technology. A distinct aspect of our study is the level of data and detail we’ve obtained on composting parameters––such as temperature, moisture and more––alongside disintegration results, which were assessed both in-field and in-lab. Compost operators tracked daily pile temperature, weekly moisture and oxygen readings, and periodically measured bulk density, pH, carbon to nitrogen ratios, compost maturity, and stability. This comprehensive data collection allowed us to correlate the composting conditions with the disintegration performance of the packaging, providing valuable insights into the effectiveness of different composting processes.  

CFTP: Most field tests we’ve coordinated have used the ‘mesh bag’ method, where several different items are packed with compost feedstock into a large mesh bag. The bag is tracked along with operating conditions like temperature, moisture and compost maturity, throughout the full composting process, both active composting and curing. At the end of the test, the material in the bag is sifted. Residuals from the test items are extracted and analyzed to measure disintegration by both weight and surface area. We provide a baseline test kit with the same test items across all tests, so we can better see the impact operating conditions have on disintegration. We also developed the “dose” method, similar to the mesh bag method, but with test items loosely piled instead of bagged. More details are available on the CFTP’s results dashboard and website as of fall 2024! 

How do your approaches to field testing align or differ from the other groups here? What should stakeholders understand about the differences and similarities in your approaches? 

CMA: Cedar Grove Composting’s initial method has been widely adopted, leading to similar mesh bag techniques across organizations. However, CMA has refined its approach, using Ingeo™ PLA as the primary control due to its consistent disintegration in all composting processes. Office paper is also used, though its disintegration varies. CMA avoids the “bulk dose” or open pile method, which places samples directly into the pile. Despite logistical challenges, this method may evolve with continued use. CMA tests products in “real world” scenarios with no pre-shredding or pre-treatment of samples, and only tests disintegration during the active composting phase, unlike other tests that extend into the curing phase, and/or may use pre-shredded or pre-treated samples. Certification requires evaluation after the active phase because some composters screen materials between these phases. Products without additional curing are screened out and reprocessed or sent to the landfill. CMA extends studies through the curing phase upon request but bases certification on active phase results to align with typical composting practices. 

CFTP: As a non-profit project, the Compostable Field Testing Program’s activities are funded by grants and donations, both financial and in-kind. The CFTP is committed to open-sourcing the data it collects in as much detail as possible, while honoring our commitment to anonymizing facility’s operating data. CFTP is rooted in collaboration between organizations supporting the circular economy and science-based research to advance industry and inform policy, evidenced by our founding partners BSIbio and CREF, and in providing advisory and implementation services for the Composting Consortium’s Disintegration Study. This model has kept the program grounded in science and problem solving, supported by forward thinking organizations. Also, relative to other field testing initiatives which tend to focus on larger–scale facilities, the CFTP aims to make field testing accessible to composters of all sizes, from community-scale to the largest commercial-scale facilities.  

CC: Since our start, the Consortium has aimed to be additive in the field of compostable packaging testing, collaborating with several of our partners including CMA, CFTP and CREF along the way. We were the first group to trial the still-developing ASTM field testing method, where both CFTP and CMA participate. We have donated data to CFTP to support the public launch of their open-source database, and we belong to international collaborations to share insights about our experience field testing compostables. One key difference in our approach is that we measured disintegration at 2 points of the compost process (Day 47 and at the end of curing). This means we may have pulled the mesh bags or packaging from the compost piles later than other field testing groups. We also did not test packaging with the intention of passing or failing any one product. We’ve collected as much data as we have with the intention of applying it to support best management practices for composers who want to accept these materials. While we will not carry out more field tests in the next two years—CMA and CFTP have that covered—we intend to work with the USCC to integrate our findings to update best management practices for composters who accept these materials. 

Behind the rapid and improbably simple exchange of products in stores, from cashier to customer (and back, as clothes are often returned), are legacy supply chains struggling to keep up with the speed required of retail today.

The rapid pace of trends and increasing volume of returns are up against slow supply chain timelines and complex logistics. This translates to a lot of excess clothing––most of it ending up in landfill. Textile recycling and recovery systems are also not yet scaled to recover all these items; often, the best case scenario is items like jeans turning into home insulation. They don’t become new jeans again.

The high cost of waste, to both retailers and consumers, has sparked the need for change, but the apparel industry has ebbed and flowed in its transition to circularity. Yet, in the past six months, the tides have been turning. What makes the next decade the time for the industry to rise to the challenge of an urgent waste crisis?

Retailers are hurting––and change is the only option.

The proliferation of style requirements, and long timelines between a brand placing their order and receiving it, have made it increasingly difficult for retailers to purchase only what they need––and to design in ways that minimize overstock and oversupply. The result is anywhere from 12-40% of clothing is unsold at the end of the season[1]. These are clothes that the brands have already paid their manufacturers for and are now taking losses on through liquidation channels. Even when a product does make it to a consumer, it will likely be worn fewer than seven to 10 times before being discarded,[2] a result of increasing consumer demand for the new and novel and manufacturers’ decisions to prioritize lower cost, lower quality construction to bring products to market quicker.

In parallel, return rates are soaring––up to 20-30% of all products purchased.[3] This costs retailers up to $30 per returned item––or even 2/3 the cost of an item––regardless of whether they’re going to be able to sell that product again.[4]  This is made more challenging because a large percentage of returns are damaged on their way back to shelves[5]. Those never make it back on shelf to begin with, even if they were efficiently processed and listed for resale. Every year, more than 9 billion pounds of material end up in landfill from consumer returns.[6] It’s no surprise that historically lenient policies for returns are beginning to fade away[7] as retailers wrestle with finding a balance between top quality customer service and operating a profitable business.

As retailers struggle to right the wrongs of legacy business models, circularity could create opportunities to reduce cost and waste together.

Consumers are aware––and want to see change.

The average consumer purchases 53 new items per person per year––U.S. consumers throw away more than 80 pounds of clothes in the same timeframe.[8] Consumers are increasingly engaging with “returnless refund” models, where retailers offer to refund a consumer a purchase and allow them to keep the product to save shipping and processing costs on returns[9] (which make very clear that the ultimate destination should they have returned the product is landfill), and are asked to engage directly with the disposal themselves. Legacy donation-led systems have also come under increased scrutiny, and it’s become clear just how much business-as-usual results in products being shipped overseas or ultimately landfilled.

In parallel, large retailers are promoting resale and takeback channels at unprecedented levels (see Trashie’s recent announcement with Steve Madden for their takeback recycling program), not to mention the mainstreaming of resale through models like ThredUp, The RealReal and others. Rental is also on the rise again, and it’s creating a sense of community, as our portfolio company, By Rotation, has demonstrated.

In other words, consumers want to be a part of the solution.

High profile “failures” are encouraging all of us to think again

Earlier this year, early innovator in textile recycling, Renew:cell, declared bankruptcy[10]––a sobering moment for all of us who work in this industry. The reality is that less than 1% of textiles are recycled into new fibers annually,[11] and while the necessity of textile recovery is widely recognized, it’s been seen as a Sisyphean task by the industry.

The cost to purchase end-of-life materials is often high. This is driven up by competition with cheaper downcycling options that do not require the same level of stringent sorting as more complex molecular processing technologies. Most of those technologies are currently operating sub-scale, with significant upfront capital requirements to grow to a point where they can produce at parity to virgin fibers.

Where is the opportunity? Necessity is the mother of invention and we’ve seen a remarkable evolution in the willingness of brands and institutional investors to support first-of-a-kind facilities supporting next life textile collection, sorting, processing and recycling in the past twelve months. An evolving capital stack is positioning us to help emerging technologies achieve scale more quickly, as more innovators come into the market to focus on lower cost solutions.

More sophisticated capital partners, and a new crop of innovators––let’s do this!

We’re (finally) all in this together.

In short, if you’ve been an innovator working to advance textile circularity, or a brand responsible for reducing waste in your supply chain, the past decade has been challenging.  But in the past two years, the narrative has shifted, and we believe the momentum has returned. Brands, consumers and innovators are coming together with urgency––because the problem of textile waste is not just one for the planet. It is an existential threat––and opportunity––for the industry itself.

At Closed Loop Partners, we’re excited to be on the front lines of this transition. We hope you’ll join us.

If you are interested in continuing to engage on this topic, Closed Loop Ventures will be co-hosting a session during New York Climate Week with the Los Angeles Cleantech Incubator. Please reach out if interested in attending at [email protected].

Note from the Author:

I am lucky to have gotten to evolve my thinking on the apparel industry in real time with a host of industry experts over the past few months. Many thanks to the Circularity24 team from Trellis––and my co-panelists from Eileen Fisher, Fillogic, Debrand and Loop, the team at Home Delivery World, innovators in textile design, reverse logistics, and recycling––including CLVG portfolio companies Browzwear, Hyran, Fillogic and so many others for helping to push my thinking.

Disclaimer:

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Capital Management or any company in which Closed Loop Capital Management or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Closed Loop Capital Management does not utilize its website to provide investment or other advice, and nothing contained herein constitutes a comprehensive or complete statement of the matters discussed or the law relating thereto. Information provided reflects Closed Loop Capital Management’s views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision. Certain information on this Website may contain forward-looking statements, which are subject to risks and uncertainties and speak only as of the date on which they are made. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. Closed Loop Capital Management undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Past performance is not indicative of future results; no representation is being made that any investment or transaction will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

[1] Source: https://www.theguardian.com/fashion/2024/jan/18/its-the-industrys-dirty-secret-why-fashions-oversupply-problem-is-an-environmental-disaster

[2] https://stateofmatterapparel.com/blogs/som-blog/10-scary-statistics-about-fast-fashion-the-environment

[3] Source: https://3dlook.ai/content-hub/apparel-return-rates-the-stats-retailers-cannot-ignore/; https://coresight.com/research/the-true-cost-of-apparel-returns-alarming-return-rates-require-loss-minimization-solutions/; https://medium.com/@shaku.tech/the-challenge-of-high-return-rates-in-the-fashion-industry-ab51878d0073

[4] Source: https://www.modernretail.co/operations/the-case-for-and-against-return-fees/;  Source: https://www.modernretail.co/operations/the-case-for-and-against-return-fees/; https://www.letsbloom.com/blog/true-cost-of-ecommerce-returns/

[5] Source: https://www.cnn.com/2021/01/30/business/online-shopping-returns-liquidators/index.html; https://www.newyorker.com/magazine/2023/08/21/the-hidden-cost-of-free-returns

[6] Source: https://www.fastcompany.com/90756025/product-returns-are-wasteful-for-companies-and-the-planet-heres-how-to-change-that; https://earth911.com/business-policy/rescuing-product-returns/

[7] Source: https://www.cbsnews.com/sacramento/news/more-retailers-doing-away-with-free-returns/; https://retailwire.com/free-returns-are-starting-to-disappear/

[8] Source: https://fashionunited.com/global-fashion-industry-statistics

[9] Source: https://www.cbsnews.com/news/returnless-refunds-retailers/; https://www.gotrg.com/company/news-events/news/this-is-everything-to-know-about-returnless-refunds-and-keep-it-options

[10] Source: https://www.renewcell.com/en/renewcell-decides-to-file-for-bankruptcy/

[11] Source: https://www.mckinsey.com/industries/retail/our-insights/closing-the-loop-increasing-fashion-circularity-in-california

Over the last decade, the use of reusable water bottles in particular has grown––many of us are familiar with the ubiquitous airport water fountains––but broader options for refill remain somewhat underwhelming. It’s, in a word, still.

Many circular reuse models today are appealing to environmentally driven consumers. While this is a growing demographic, it is still not scaled. The question remains: how do we get reuse into the mainstream? How do we get it to, in a word, sparkle?

To gain mainstream traction and drive a shift, solutions need to be better without compromise. Along with environmental benefits, they need to be more delightful and cost less to the end consumer.

Enter Aerflo. John Thorp and Buzz Wiggins, co-founders of Aerflo, started on this journey as outdoor adventurers frustrated that the beverages they wanted to drink only came in single-use, disposable packaging. Together, they embarked on building a solution that would make it possible to enjoy these beverages without waste and create a user experience that catered to the on-the-go lifestyle––all driven by a circular model.

Demand for sparkling water is on the rise in the U.S., with the market anticipated to grow at a compound annual growth rate of over 12% from 2023 to 2032. Today, we are not only seeing a diversity of options on retail shelves, but also a wave of innovations making it possible for consumers to make their own sparkling water. We have seen the growth of at-home countertop devices, such as Soda Stream and Aarke, and in-office spaces with Bevi, introducing a shift away from single-use packaging. But for consumers who want sparkling water on the go, single use has been the only option.

After years of building, John and Buzz launched Aerflo with the first-of-its-kind portable Aerflo Aer1 System that can turn any drinkable water source into refreshing sparkling water with the press of a button. The bottle houses a carbon capsule that can carbonate four full bottles of water. It is designed so that users can see carbonation happen, to gauge how much sparkle to add. The small bubbles mimic those in sparkling water sold in stores, bringing sparkling water to consumers without the need to ship glass bottles or cans filled with water thousands of miles. By inspiring and enabling reuse, Aerflo helps reduce waste and greenhouse gas emissions.

John and Buzz started with the concept of bubbles-on-the-go. How delightful would it be to add bubbles to beverages anywhere in the world, elevating the experience of drinking water, whether someone was on top of a mountain or running through New York City?

Every detail was carefully considered and crafted, ensuring that convenience and taste were not compromised for circularity––a critical factor to the success of reuse.

When capsules are empty, customers ship them back to Aerflo (in the same packaging, and with a return label pre-affixed). This immediately triggers the customer’s next order to be sent––so no subscription is needed. In the company’s fully automated, circular refill facility in New Jersey, the returned Aerflo capsules are cleaned, inspected and refilled before being shipped out to the next customer.

The model is entirely circular. Aside from the clear environmental benefits (each capsule can prevent the need for 330+ cans in its lifetime) this system drives cost savings for customers (60%+ less than single use) and gives the option of still or sparkling at any moment.

Over the past decade, Closed Loop Partners has reviewed hundreds of reuse models through our Closed Loop Ventures Group; we have also tested reuse models in-field and conducted reuse research through our Center for the Circular Economy. And now, Closed Loop Ventures Group is thrilled to announce our investment in Aerflo, a company offering what we believe is a natural choice for on-the-go consumers looking for an elevated experience.  Aerflo drinkers don’t need a subscription or commitment and the company offers better value: it is less expensive on a per liter basis than buying carbonated bottled water and offers a more delightful experience to aerate water anywhere, helping make reuse an everyday habit.

About Closed Loop Ventures Group at Closed Loop Partners

Closed Loop Partners has been a leader in the reuse movement for almost a decade. Today, we are actively catalyzing the shift to reuse through our investments and in-market tests––unlocking critical insights and supporting reuse solutions in the field to prepare them for scale. From years of in-field testing and deep research, we have proven that to build successful reuse systems, we need to make reuse a natural choice.

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments: its investment arm, Closed Loop Capital Management; its innovation center, the Center for the Circular Economy; and its operating group, Closed Loop Builders. Closed Loop Capital Management manages venture capital, buyout private equity and catalytic private credit investment strategies. The firm’s venture capital group, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough solutions for the circular economy since 2016. The Closed Loop Ventures Group’s portfolio includes companies developing leading innovations in material science, robotics, agritech, sustainable consumer products and advanced technologies that further the circular economy. Closed Loop Partners is based in New York City and is a registered B Corp.

About Aerflo

To learn more, visit https://aerflo.co/.

Disclaimer

This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Capital Management or any company in which Closed Loop Capital Management or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Closed Loop Capital Management does not utilize its website to provide investment or other advice, and nothing contained herein constitutes a comprehensive or complete statement of the matters discussed or the law relating thereto. Information provided reflects Closed Loop Capital Management’s views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision. Certain information on this Website may contain forward-looking statements, which are subject to risks and uncertainties and speak only as of the date on which they are made. The words “believe”, “expect”, “anticipate”, “optimistic”, “intend”, “aim”, “will” or similar expressions are intended to identify forward-looking statements. Closed Loop Capital Management undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. Past performance is not indicative of future results; no representation is being made that any investment or transaction will or is likely to achieve profits or losses similar to those achieved in the past, or that significant losses will be avoided.

The Center for the Circular Economy at Closed Loop Partners shares insights on how businesses can align with customers in reducing cup waste, drawing on lessons learned from 90 Bring-Your-Own-Cup (BYOC) initiatives in cafés and restaurants across the U.S.

Read more to learn about our insights.

Download Our Insights Here

For 10 years, our thesis at Closed Loop Partners has remained consistent. The linear economy of materials management––characterized by extraction, single use and disposal––is inefficient. A more effective system exists: a circular economy, whereby people and businesses are custodians of materials over perpetual life cycles. The circular economy creates new value––a fundamental shift in the way society has managed resources over the last 75 years. But to sustain itself well into the future, circularity must be more profitable than the linear system. 

Closed Loop Partners saw the economic, environmental and social opportunity in circularity. It was one of the first investment firms to bring together incumbent and emerging players to collectively accelerate this transition. As the firm enters its tenth year, cross-industry stakeholder participation continues to prove its effectiveness in advancing systemic change. Today, markets are experiencing the momentum driving the acceptance and understanding of circularity. Tailwinds including technological innovation, consumer sentiment, regulatory incentives, net-zero commitments and the need for supply chain resiliency propel the current transition. As the circular economy disrupts the status quo, it also presents investment opportunities, inviting collaboration across unexpected corporate, financial, government and community stakeholders.  

The opportunity of the circular economy goes far beyond recycling. It represents full systems change, revamping each point in the supply chain: product design, logistics technology, collection capacity reprocessing and remanufacturing. Industries from consumer package goods (CPG) to food & agriculture, retail, technology, energy and the built environment stand to benefit from more efficient management of materials such as plastics & packaging, organics, textiles and critical minerals. To advance systems change across the product life cycle of different materials, different forms of financing are needed.  

Today, Closed Loop Partners manages three primary investment strategies: early-stage venture capital, buyout private equity and private credit and catalytic capital. But 10 years ago, our work started with catalytic capital, to amplify the opportunity of circularity and to crowd traditional investment into the capital gap for the transition. 10 years later, it continues to be a critical piece of the puzzle.  

Alongside traditional equity and debt solutions, catalytic capital––defined as flexible financing that prioritizes specific outcomes over prevailing market returns––can send a market signal to direct capital flows. This accelerates the uptake and scale of private businesses, municipal projects and infrastructure that are key contributors to durable, circular operations. For a decade, our catalytic investments, provided by Closed Loop Partners’s Infrastructure Group, have been connecting profit incentives with urgent environmental and social impact outcomes. Backed by global retailers, consumer package goods, technology and material science corporations and foundations such as Walmart, Unilever, Starbucks, PepsiCo, P&G, Microsoft, Keurig Dr Pepper, Kenvue (formerly Johnson & Johnson Consumer Health), Danone, Colgate-Palmolive, The Coca-Cola Company, BlueTriton, Amazon and 3M, these private credit and hybrid investments support innovations, private businesses, municipal projects, equipment upgrades and facility development.  

By deploying below-market rate and more flexible financing than would otherwise be available, the Closed Loop Infrastructure Group aims to:   

• attract follow-on capital from traditional capital markets  
• increase the quality and quantity of recycled material kept in the system 
• mitigate greenhouse gas emissions 
• create more jobs across communities  
• advance corporate strategic goals of integrating circularity into their operations.  

As early champions of catalytic capital, Closed Loop Partners has worked with an array of municipalities and private companies to accelerate the transition to a profitable and more sustainable system. 10 years in, we have seen the ability of this financing to catalyze the market, in more ways than one.  

• Catalyzing More Capital: rPlanet Earth was founded to provide high-quality recycled PET (rPET) packaging and containers to food, beverage and other CPG companies. Operating under a single roof, it is the world’s first completely vertically integrated manufacturer of multiple high rPET content products (up to 100% rPET), creating a much-needed market for the PET packaging collected from curbside recycling programs across California. rPlanet Earth is committed to providing the lowest carbon footprint packaging and products in the marketplace. In 2018, Closed Loop Partners identified the opportunity to bridge a near term capital gap and send a market signal. Our catalytic group provided a $1.5 million loan. Grants and loans from California’s Department of Resources Recycling and Recovery (CalRecycle), CAEATFA and private debt financing sources also provided alternative financing solutions. Also, one of the four largest banks in the U.S. provided a multi-million-dollar loan to finance the construction of their first facility. Together, this capital, along with substantial equity investments from two prominent funds financed rPlanet Earth’s first plant in Vernon, CA. 

• Catalyzing Growth: By 2019, Phoenix, Arizona had risen to the fifth largest metropolis in the United States, resulting in a higher volume of recyclable materials. With a $3 million investment from the Closed Loop Infrastructure Group, the City of Phoenix upgraded its North Gateway materials recovery facility (MRF) to enable greater diversion of plastics from landfill and to improve the quality of baled paper produced. The upgrade also helped to increase the overall tonnage of residential recycled materials processed and recovered by the City’s MRF by over 25% within the two years after investment. The city has established a strong reputation for its commitment to the circular economy and its zero waste plan.  
  

• Catalyzing Scale: In 2022, the Closed Loop Infrastructure Group invested in Greyparrot, a leading AI waste analytics platform for the circular economy. Their AI Waste Recognition System is deployed on moving conveyor belts in sorting facilities globally, with the mission of using AI to significantly improve recycling efficiency and increase resource recovery. Supported by funding, Greyparrot has grown to now identify over 25 billion waste objects each year, with 100+ of its Greyparrot Analyzer Units spread across more than 17 countries, and is working with three of the top eight global waste management companies.  

Our future requires an increase in material circularity and urgent climate action. Our work at Closed Loop Partners advances efficient materials management and optimized supply chains in a more profitable, more resilient circular system. There is significant opportunity to transition the over $100 trillion global economy from the incumbent linear economic system characterized by wasted resources and profit leakage, to a more efficient circular economy. The Circularity Gap Report estimates that as of 2023, just 7% of the global economy was circular. There is over 90% of the economy yet to transition across materials including paper, metal, plastic, organics, water, critical minerals and carbon itself, and across industries from CPG to fashion, from technology to transportation, energy to real estate.   

The transition to circularity presents trillions of dollars of opportunity. Catalytic capital can spark capital flows and accelerate scale, making the innovations, businesses, municipal projects and infrastructure that are critical to a profitable circular system move faster than they otherwise would. For potential collaborators––corporate, foundation, municipal finance or other institutional capital––that would like to learn more, please get in touch with our team. Join us in accelerating the transition to a market-driven circular economy and, in doing so, build a climate-positive future. 

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*This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Partners or any company in which Closed Loop Partners or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Information provided reflects Closed Loop Partners’ views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision. 

Microbes are behind well-known industrial processes: from yeast for leavening bread or producing ethanol to acetic acid bacteria for vinegar production. These processes typically start with some sort of carbohydrate or sugar-rich feedstock, in which the living organisms are added and allowed to eat their way through the feedstock in a process known as fermentation. Closed Loop Partners has long been exploring the prospect of using microbes to advance circularity, such as creating energy from food waste––as seen through the work of one of our earliest portfolio companies, HomeBiogas. Today, we are seeing even more opportunities for microbes to change the way we produce, and this drove our investment in Capra Biosciences.

Capra sits at the confluence of synthetic biology, resilient supply chains for national defensive strategies, and sustainable consumption. Capra leverages a unique microbe to consume organic feedstocks (like food waste) and convert those materials into high value molecules that are direct replacements for petrochemical-derived products. This can range from molecules used in cosmetics to high value lubricants.

In taking these waste feedstocks and upcycling them into some of the highest value end products, Capra demonstrates how synthetic biology sits at the heart of the circular economy:

• Reducing reliance on extractive industries: Capra is displacing petroleum-based feedstocks for hydrophobic chemicals. This eliminates the need for extractive mining processes and instead leverages waste feedstock to produce high value commodity products at a price point that is competitive with market incumbents.
• Leveraging waste feedstock: Synthetic biology is often reliant on sugars as feedstock for the microbes, which come from net new agricultural production. Capra is starting with food-waste derivatives that are widely available. By giving these materials another life, Capra diverts food waste from landfill and offers a more sustainable product.
• Process-flow material recovery: An ideal system is one in which the microbes and solvents can be recovered after one pass through the system, leaving a close to zero waste process and positively impacting unit economics.
• Distributed, on-site generation: Capra’s technology design allows for continuous flow and modularity, meaning they can convert waste carbon sources such as food waste into high value chemistries onsite. By keeping production and distribution local and integrated, their process helps reduce emissions associated with transportation.

Given the promise of synthetic biology, we are proud to be backing the expert team of Liz Onderko, PhD and Andrew Magyar, PhD, co-founders of Capra Biosciences. We have compiled a diverse syndicate of support, including SOSV, GS Futures, First Bight, E14 and others to support Capra in their work to make high performance and affordable renewable chemicals for the circular economy. Learn more about Capra Biosciences here or reach out to [email protected].

About Capra

Closed Loop Partners is at the forefront of building the circular economy. The company is comprised of three key business segments: its investment arm, Closed Loop Capital Management; its innovation center, the Center for the Circular Economy; and its operating group, Circular Services. Closed Loop Capital Management manages venture capital, buyout private equity and catalytic private credit investment strategies. The firm’s venture capital group, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough solutions for the circular economy since 2016. The Closed Loop Ventures Group’s portfolio includes companies developing leading innovations in material science, robotics, agritech, sustainable consumer products and advanced technologies that further the circular economy. Closed Loop Partners is based in New York City and is a registered B Corp. Closedlooppartners.com.

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This publication is for informational purposes only, and nothing contained herein constitutes an offer to sell or a solicitation of an offer to buy any interest in any investment vehicle managed by Closed Loop Partners or any company in which Closed Loop Partners or its affiliates have invested. An offer or solicitation will be made only through a final private placement memorandum, subscription agreement and other related documents with respect to a particular investment opportunity and will be subject to the terms and conditions contained in such documents, including the qualifications necessary to become an investor. Information provided reflects Closed Loop Partners’ views as of a particular time and are subject to change without notice. You should obtain relevant and specific professional advice before making any investment decision.