Construction and demolition is now one of the biggest sources of waste in the world. By 2025, the annual volume of construction waste generated globally is expected to reach 2.2 billion tons.[1] In the U.S. alone, 600 million tons of construction and demolition debris were generated in 2018, more than twice the amount of municipal solid waste.[2]

The challenge lies not only in sheer volume, but in the complexity of construction materials. Non-concrete waste material––such as wood, drywall, asphalt shingles and tile––often have plasticizers (chemicals that make materials more flexible and easier to mold), trace or heavy metals and polychlorinated compounds in them, making it hard to recover those materials for their next lives. Furthermore, when those materials end up in landfills, they can leach those toxic chemicals into arable land and waterways––where they leave lasting environmental consequences.

Mycocycle, a biotechnology startup, found a solution to help address this complex challenge, inspired by fungi. Their patent-pending process improves the natural functions of fungi to transform construction waste into low-carbon raw materials for the built environment. Within a matter of weeks, their technology can turn organic waste from the built environment––such as carpet fiber and tires––into MycoFIBER©, MycoFILL© and MycoFOAM©, all raw materials that can replace virgin-derived materials.

Closed Loop Partners’ Ventures Group saw a key opportunity in Mycocycle’s technology, a solution that reimagined how materials can be recovered and kept in circulation. This aligned with Closed Loop Ventures Group’s focus on deploying early-stage funding to breakthrough circular solutions for foundational materials that underpin and influence vital sectors of the economy––from water and minerals to polymers and organics. Mycocycle’s solution to recover organic waste in the built environment unlocks new possibilities for circularity across a major industry.

Last year, Closed Loop Ventures Group led Mycocycle’s Series Seed extension to help address the growing challenge of construction waste––with participation from US Venture, the Illinois Department of Commerce and Economic Opportunity INVENT fund, and existing investor TELUS Pollinator Fund for Good.

Since then, over the past 10 months, the Mycocycle team has continued to impress––making significant progress on processing cost reductions and signing exclusivity agreements with major multinational companies for certain product categories. They are demonstrating that not only are their products not harboring the toxic chemicals of their inputs, but they are exhibiting significant performance improvements––in strength, elasticity and more––from the virgin-derived construction products they’re replacing.

Today, the team continues to operate in the south of Chicago––in a space nearly five times the size of the one they were working in over a year ago. And they are filling orders, using mycelium to transform organic waste from the built world into reusable, bio-based ingredients. Those ingredients are going into non-recoverable plastics, replacing food-grade fillers like corn stover, for which higher and better uses exist in biomanufacturing. They are also going into turf applications, replacing materials that have been outlawed in some geographies because of excessive microplastic shedding that pollutes airways and waterways. With products that are both cost competitive against the incumbents and gross margin accretive for the business, Mycocycle is on a path to scale that has already unlocked significant reductions in their processing costs––and there is still room for growth.

A big part of how Closed Loop Ventures Group invests is by identifying founders and leadership teams who balance a “no quitting” attitude with the detail orientation and the project management expertise to move the needle on tough challenges. Joanne Rodriguez, Founder & CEO of Mycocycle, and Colin Litow, COO of Mycocycle, exemplify these characteristics, creating a strong foundation for their team through its next phase of growth.

Today’s reality is that the built environment is still in the early stages of bringing circular principles to bear in the lion’s share of applications. Asynchronous design and demolition processes make it challenging to identify reuse and next life opportunities for materials, and the lifecycle of a building is long enough that it’s rare for an organization to think about disassembly and deconstruction at the time of design. Even if they were, less than 2% of the building stock is new each year.[3] Much more focus is needed on managing renovation and retrofit processes––not just tracking, but on finding new homes for the materials once they’re removed.

Mycocycle is a core part of the solution, as are the companies exploring opportunities to maintain or reduce costs while using recovered materials as inputs into their products. Closed Loop Partners’ Ventures Group is excited to continue to work with the Mycocycle team and those across the manufactured world as they lay the groundwork for a more circular future for the built environment.

About Closed Loop Ventures Group at Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The firm is comprised of three key businesses that create a platform for systems change: an investment group managing venture capital, buyout private equity and catalytic private credit investment strategies, Closed Loop Capital Management; an innovation center, the Center for the Circular Economy; and an operating group, Closed Loop Builders.

The firm’s venture capital strategy, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough circular solutions for foundational materials that underpin and significantly influence a wide array of vital sectors of the economy. These materials include organics, minerals, polymers and water. Closed Loop Ventures Group partners with founders and companies who rethink how products are designed, manufactured, consumed and recovered, with the shared vision of reimagining supply chains and eliminating waste. Closed Loop Partners is based in New York City and is a registered B Corp.

To learn about the Closed Loop Ventures Group and apply for funding, visit www.closedlooppartners.com.

 About Mycocycle

Mycocycle, Inc. is a nature-inspired and woman-owned biotechnology startup that leverages fungi to transform industrial waste into reusable materials. Founded in 2018, the company drives circularity in the construction supply chain and diverts waste from landfills. Mycocycle blends lab-cultivated fungi with debris at the point of waste generation to transform waste into new raw materials. To learn more, visit http://www.mycocycle.com.

[1] Source: Construction Dive.

[2] Source: Environmental Protection Agency.

[3] Source: https://www.usgbc.org/articles/existing-buildings-99

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. 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.

Colorado, United States, January 28 2025 –– LAIIER, an innovative liquid leak detection solution provider for commercial and industrial buildings, announced today that it has raised US$4M in seed extension funding. Closed Loop Partners’ Ventures Group, the venture capital arm of the circular economy-focused firm, led the financing round, with participation from six other funds.

Existing investors Burnt Island Ventures and Mundi Ventures participated in the round, and were joined by new investors Bonaventure Capital, Carlisle Ventures, One Small Planet, and Virta Ventures.

 LAIIER focuses on solving the $19B+ annual problem of damage and downtime caused by liquid leaks in commercial buildings and industrial equipment. Traditional leak detection methods are inefficient, relying on manual inspections and resulting in slow response times of over 80 hours. This leads to significant financial losses, with properties experiencing between one and four large leak events annually. The severity of these leaks can vary widely, with costs escalating rapidly for severe cases and risks of expensive insurance claims and water loss increasing.

As real estate owner operators continue to seek more reliable leak detection that has a positive impact on both financial and environmental metrics, LAIIER’s technology offers scale, precision, and ROI that few other solutions on the market can match.

First launched in 2022, the company’s flagship water leak detection product, Severn WLD™, is currently protecting assets in a range of commercial and industrial buildings in North America and Europe, including those of Fortune 500 and FTSE 100 companies. The technology detects as little as two drops of water, offers flexible installation, precise sensitivity control, and utilizes long-range, low-power communication.

These advanced sensors, and the company’s cloud platform, LAIIER Cloud™, enable early detection of leaks and real-time monitoring, contributing to substantial water savings by alerting customers to issues before they escalate. By identifying leaks in their initial stages, LAIIER’s technology plays a crucial role in preventing extensive water damage to buildings and equipment, and helps mitigate the loss of water––an increasingly scarce and valuable commodity.

“This funding round represents a pivotal moment for LAIIER as we continue to accelerate our growth across North America and Europe,” said Matt Johnson, CEO & Co-founder of LAIIER. “Closed Loop Partners’ Ventures Group is renowned for its leadership in sustainable innovation and its deep expertise in scaling transformative technologies. Their prestigious reputation and proven track record in advancing successful businesses align perfectly with our mission to redefine leak detection in industrial and commercial markets. We are honored to have their support and partnership.”

The primary focus of the funding is to support the acceleration of LAIIER’s commercial growth globally, with a particular focus on North American expansion. The funds will also support the company’s continued investment in the development of its patented liquid leak detection technologies––both the commercially available water leak detection product, Severn WLD™; and the development of further liquid leak detection products for specific commercial and industrial applications.

“In an escalating climate crisis marked by increasing water scarcity and frequency of extreme weather events––from fires to flooding––solutions like LAIIER’s drive awareness and action around our relationship with water and industrial lubricants, and represent a crucial step toward less damage and a better experience with insurers when damages occur. LAIIER’s technology not only minimizes the risk of significant financial losses for asset owners, it can also prevent minor leaks from developing into major events, potentially conserving millions of gallons annually,” said Aly Bryan, Investor on Closed Loop Partners’ Ventures Group team. “We are proud to support LAIIER’s continued growth in North America, and look forward to working with their team to advance circularity across industrial applications and in the built world at scale.” 

About LAIIER

LAIIER solves the $19B+ annual problem of damage and downtime caused by liquid leaks in commercial buildings and industrial equipment. The company’s patented technologies deploy digital intelligence to detect and alert customers to leaking water, hydrocarbons, and more. Customers subscribe to the full-stack solution, which includes a unique sensor technology, connectivity and cloud services; providing a scale, precision, capability, and return on investment that competitors cannot match. LAIIER’s technologies are deployed with insurers, real estate owner operators, and system integrators in North America and Europe.

About the Closed Loop Ventures Group at Closed Loop Partners

Closed Loop Partners is at the forefront of building the circular economy. The firm is comprised of three key businesses that create a platform for systems change: an investment group managing venture capital, buyout private equity and catalytic private credit investment strategies, Closed Loop Capital Management; an innovation center, the Center for the Circular Economy; and an operating group, Closed Loop Builders.

The firm’s venture capital strategy, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough circular solutions for foundational materials that underpin and significantly influence a wide array of vital sectors of the economy. These materials include organics, minerals, polymers and water. Closed Loop Ventures Group partners with founders and companies who rethink how products are designed, manufactured, consumed and recovered, with the shared vision of reimagining supply chains and eliminating waste. Closed Loop Partners is based in New York City and is a registered B Corp.

To learn about the Closed Loop Ventures Group and apply for funding, visit www.closedlooppartners.com.

PRESS CONTACTS

LAIIER

Laura Lilienthal, VP of Marketing, [email protected]

Closed Loop Partners

Bea Miñana, Communications Director, [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.

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.

November 13, 2024, New York, NY — Closed Loop Partners‘ Ventures Group announces its follow-on investment in Earthodic, a Brisbane-based biotechnology company creating recyclable bio-based coatings for paper packaging. This is Closed Loop Ventures Group’s second investment in Earthodic, supporting the company’s expansion into the U.S. The $4 million seed funding round was led by FTW Ventures, with participation from existing investors Closed Loop Partners’ Ventures Group, Tenacious Ventures and Investible, and new investors Circulate Capital, Queensland Investment Corporation, UniQuest Fund, Significant Capital Ventures, Branch Venture Group and Redstick Ventures.

The investment is taking place as more corporations demand packaging alternatives that reduce waste while maintaining performance. Today, most paper packaging uses petroleum-based plastic liners that help prevent leakage and maintain temperature but are typically discarded as waste. Closed Loop Ventures Group saw an opportunity to advance bio-based coatings that can enable better performance of existing paper packaging or products and unlock opportunities to switch from non-recoverable single-use plastics to recoverable bio-based alternatives.

Earthodic’s Biobarc™ is a water-resistant, repulpable and recyclable coating for paper packaging, offering a solution for brands and packaging manufacturers looking to transition away from wax and polymer film coatings to reduce plastic waste. Earthodic uses lignin––a byproduct of paper manufacturing that is often discarded or burned for energy––and reintegrates it into Biobarc™ to create a recyclable solution for paper packaging. The company is also pursuing third party certifications to ensure Biobarc™’s compostability at industrial composting facilities in the U.S., creating more potential end-of-life pathways for the material.

“This is a key milestone for Earthodic as we expand our reach into new geographic markets, and new paper packaging applications. Advancing a bio-based coating for paperboard can have a significant impact on plastic waste reduction,” says Anthony Musumeci, Co-founder and CEO of Earthodic. “Closed Loop Partners’ Ventures Group has been a key partner in our growth since they first invested in Earthodic. We are thrilled to continue our partnership with their team as we scale our solution and advance the circularity of packaging.”

Closed Loop Ventures Group’s investment in Earthodic advances the group’s mandate to deploy early-stage capital to founders and companies who rethink how products are designed, manufactured, consumed and recovered. Since Closed Loop Partners’ venture capital group launched in 2016, it has invested in over 40 companies advancing solutions that optimize supply chains and reduce reliance on fossil fuel extraction and landfilling. These range from packaging & plastic alternatives to safer chemistry and supply chain transparency to waste reduction solutions for food & agriculture, retail logistics, renewable energy, water reclamation, built environment and distributed manufacturing.

“Packaging waste comprises 30 percent of materials sent to landfill today, creating a significant challenge for brands and packaging manufactures looking to meet zero waste goals. Earthodic’s coating offers a circular solution for paper packaging that can help divert materials from landfill while maintaining the same performance capabilities brands have come to expect from their packaging solutions,” said Aly Bryan, Investor on the Closed Loop Ventures Group team at Closed Loop Partners. “Closed Loop Ventures Group is proud to have been among the first investors in Earthodic and we look forward to supporting their growth as they scale throughout the United States with their solution.”

With capital from its seed funding round, Earthodic will establish a second headquarters at Western Michigan University Homer Stryker M.D. School of Medicine Innovation Center, situated near a pilot coating plant and testing facilities used extensively by the paper industry. Their main research & development hub will stay in Queensland, Australia. The company will deepen existing research & development partnerships with global leaders in paper packaging while continuing to sell Biobarc™ into non-food contact packaging at scale, as a superior solution to traditional wax and petroleum-based coatings.

This will create more opportunities for circularity across the packaging, food and consumer goods industries.
If you are interested in learning more about Closed Loop Partners’ Ventures Group, please visit www.closedlooppartners.com.

If you are interested in learning more about Earthodic, please visit www.earthodic.com.

About Earthodic
Earthodic is on a mission to advance the global transition to a circular economy. We help companies within the paper industry and their customers adopt sustainable packaging solutions, mitigating packaging waste that ends up in landfill. Earthodic has created sustainable function barrier coatings that are certified 100% biobased carbon, to offer liquid water barrier and oil and grease resistance to paper-based packaging. Earthodic coatings utilize lignin, a by-product of the pulp and paper industry, and are a drop-in solution for existing coating infrastructure. Established in 2022, Earthodic has operations across Australia and the USA.

To learn more, visit www.earthodic.com.

About Closed Loop Partners
Closed Loop Partners is at the forefront of building the circular economy. The firm is comprised of three key businesses that create a platform for systems change: an investment group, Closed Loop Capital Management; an innovation center, the Center for the Circular Economy; and an 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 strategy, the Closed Loop Ventures Group, has been investing early-stage capital into companies developing breakthrough solutions for the circular economy since 2016. 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.

To learn about Closed Loop Ventures Group, visit www.closedlooppartners.com.

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. 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.

STERLING, Va., Oct. 9, 2024 — Molg Inc. (“Molg”) announces the closing of $5.5 million in seed funding to scale the company’s circular manufacturing processes for electronics and electrical components. Closed Loop Partners’ Ventures Group led the round, with participation from Amazon Climate Pledge Fund, ABB Robotics & Automation Ventures, Overture, Elemental Impact and Techstars. The company plans to use funding to scale production capacity and meet growing customer demand for circularity and automation.

The funding round is closing at a pivotal time, amidst growing urgency to keep electronics in circulation and recover the critical minerals needed to support the clean energy transition. Today, tens of millions of tonnes of electronic devices are discarded or become obsolete each year. In 2022, only 22.3 percent of e-waste was recycled, according to data from the UN Global E-waste Monitor, resulting in the vast majority of electronics being sent to landfill, where they release greenhouse gasses and chemical substances into the environment. Over $62 billion worth of critical minerals and precious metals are also left unrecovered within electronics waste, missing the opportunity for reuse and remanufacturing for clean energy supply chains. As these materials grow increasingly scarce, expensive and geopolitically sensitive, more solutions are needed to ensure they are kept in circulation.

“After a decade in consumer electronics manufacturing, we founded Molg because we saw firsthand how current design, production and recovery processes—or the absence thereof—contribute to the massive problem of e-waste,” said Molg cofounder and CEO Rob Lawson-Shanks. “Achieving true circularity requires a fundamental shift in the underlying systems that support demanufacturing. It starts with better design and is enabled by dynamic automation. This funding allows us to accelerate our work at both ends of a product’s life, designing for circularity from the start and recovering valuable devices, components and materials through automated disassembly.”

Molg is tackling the e-waste challenge through a comprehensive circular manufacturing process powered by robotics and design. Its robotic microfactories can autonomously disassemble complex electronic products to recover valuable components for reuse, remanufacturing or recycling. The team also partners with leading manufacturers to design electronics with circularity in mind—ensuring one product’s end is another’s new beginning.

“We invested in Molg because they are rethinking how critical materials can be recovered from electronics, addressing a historically overlooked source of valuable resources. Their process maximizes the value of recovered materials and allows for local recovery where materials are most needed––important parts of advancing the circular economy,” said Aly Bryan, Investor on the Ventures Group team of Closed Loop Partners, a firm focused on building the circular economy. “They are helping to unlock a scalable solution that not only reduces environmental impact but also strengthens supply chains by recovering materials domestically.”

Molg has its headquarters and manufacturing facility in the heart of the data center industry in Northern Virginia. The company’s seed round of funding will be used primarily to scale production to meet customer demand for circular supply chains.

“Amazon remains committed to our decarbonization efforts and supporting technologies that aim to improve the circularity of our supply chains,” said Sam LaPierre, Investor at Amazon’s Climate Pledge Fund. “Efforts to improve hardware demanufacturing and material recovery, such as those developed by Molg, are promising technologies that can help advance the recycling and material recovery industries at scale. We are excited to support the growth of Molg, a company at the forefront of unlocking circular supply chains for electronics.”

Molg has already installed robotic disassembly Microfactories at Sims Lifecycle Services and is rolling out to ITAD facilities of leading hyperscalers. The team also works on circular design with leading companies like HP, Dell and ABB Robotics & Automation Ventures to redesign products for the automated recovery of valuable components, remanufacturing and recycling.

“Our investment in Molg will open new possibilities for using industrial robots in the recovery and recycling of data center equipment,” said ABB Robotics Managing Director Business Line Industries, Craig McDonnell. “By helping to enable the automated disassembly and responsible disposal of disused electronics, we are excited to be playing our role in transforming the circularity and sustainability of the data center sector.”

“We invested in Molg to help solve two critical challenges: dealing with mountains of toxic waste that are growing every year, and meeting the rapidly increasing demand for critical minerals in batteries, data centers, and electronics,” said Elemental Impact CEO Dawn Lippert. “Molg is an example of how innovation in AI and robotics can be good for the planet and consumers: why would we landfill precious metals when we can recover them domestically and reuse them?”

“The AI boom and rapid expansion of data centers is coinciding with an energy transition that demands an immense supply of critical minerals. Molg helps hyperscalers and electronics manufacturers tap into the supply of retired servers and other e-waste that still contain immense material value,” said Overture Climate VC Managing Partner, Shomik Dutta. “Molg’s robotic solution not only moves the industry towards circularity; it presents a supply that is cheaper and more domestically secure.”

About Molg
Molg tackles the growing e-waste problem by making manufacturing circular. The company’s robotic microfactory can autonomously disassemble complex electronic products like laptops and servers, helping keep valuable components and materials within supply chains and out of landfills. Molg partners with leading electronics manufacturers to design the next generation of products with reuse in mind, ensuring that one product’s end is another’s beginning. To learn more, visit molg.ai.

About Closed Loop Partners
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. To learn more, visit closedlooppartners.com

About ABB Robotics & Automation Ventures
ABB Robotics & Automation Ventures (ABB RA Ventures) is the business-led strategic venture capital unit of ABB Robotics & Discrete Automation, part of ABB’s corporate venture capital framework: ABB Ventures. Since its formation in 2009, ABB Ventures, formerly known as ABB Technology Ventures (ATV), has invested around $500 million into startups having a close fit to its electrification, robotics, automation, and motion portfolio. For more information, visit www.abb.com/ventures

About Elemental Impact
Elemental Impact is a non-profit investing platform that invests in climate companies and projects with deep local impact. Elemental has a 15-year history of investing in real world solutions that make neighborhoods and homes cleaner, healthier, safer, and more affordable. The investing platform scales climate technologies through a three-tiered approach: deploying catalytic capital, providing project expertise, and prioritizing community partnership. Elemental’s portfolio is active nationwide as well as in more than 100 countries and has raised over $10B in follow-on funding.

About Overture
Overture Climate VC is an early-stage climate tech fund with a focus on helping founders win government support and navigate regulatory complexity. For more information, visit https://www.overture.vc/

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.

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.

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. 

The way scrap metal is processed today is a mystery to most outside the industry. When a car or an appliance reaches the end of its useful life, most of us often rely on a junk removal service––or hope that the retailer selling the new equipment will take the old one with them on the way out. What happens after that?

Emily Molstad, Caleb Ralphs and their team at VALIS Insights have spent the past five years getting to know these markets in minute detail. Imagine spending days and nights captivated by how metals are processed in the U.S. after they’re done being used. Imagine coming face-to-face with the information asymmetries in the system that result in mixed metals being shipped overseas instead of recovered for local use. Imagine having hundreds of conversations with processors, metals refiners and customers of virgin and recycled metals to better understand why the system is built the way it is and where there are opportunities to improve it. That’s what this team has done so comprehensively over the past few years, driving toward the creation of their AI-powered software that is closing the loop on a circular economy for metal fabrication.

Today, used metals are still dramatically under-recovered in the U.S. Recycling rates for many non-ferrous and ferrous metals lag below 60%, despite the high resale value of these materials. As of the latest data from the EPA, only 27.8% of ferrous metals (those containing iron) were recycled in 2018––and nearly 7.2% of all municipal solid waste landfilled in 2018 was from steel––equivalent to 10.5M tons. The reality is often worse for non-ferrous metals (such as aluminum, copper, nickel) which may only be sorted for recycling after their heavier ferrous counterparts are removed.

These insufficient recycling rates for metals can be attributed to losses during material processing. Current recycling technology and processing capabilities struggle to address the growing complexity of mixed metal products, leading to contaminated and downgraded metal recovery. Scrap processors have historically recovered only certain metal commodities that were perceived to have higher resale value, leaving out other various mixed metals from the sorting process and shipping them overseas. As a result, significant volumes of aluminum, copper, nickel and cobalt are lost from our domestic supply. However, increasing domestic demand in the U.S. is driving up value for these types of materials, and tools like VALIS’s solution help scrap processors understand the monetary value of the metals they are currently selling overseas.

Closed Loop Partners has long understood the complexities of end-of-life commodity markets––we’ve been investing in the space for a decade and recognize that challenges exist at every stage in the value chain––collection, sorting, resale and ultimately recovery into the next life. For large format composite metals––such as automotive, appliances and heavy machinery––collection has rarely been a problem. These products are bulky enough that they typically end up in processing facilities around the country. The challenge is what happens after that.

We invested in VALIS because their software improves the sorting process of mixed metals and allows domestic processors to maximize the resale value of the outputs, keeping more metals in local circulation. By capturing data on commodity prices and input materials and delivering high-value insights on material and processing trends, they help optimize sortation processes to capture the most valuable metals that might otherwise be overlooked. With more optimized and predictable sortation, processors can command higher prices for higher quality outputs.

As the U.S. faces an extreme shortage of critical metals that are required for the renewable energy transition, solutions like this are increasingly important. Copper, nickel, aluminum, graphite and steel among others are seen as critical and are expected to be in . Many companies have now mandated chain-of-custody and fair labor validation of the minerals and metals used within their supply chains. VALIS helps create lower cost, resilient and transparent supply chains for these metals domestically––and focuses on metal recovery from current waste streams rather than incremental extraction. This provides multiple benefits including reducing waste, enhancing local economies and lowering the emissions footprint of the recycled metals.

Overall, VALIS helps recover more pure metals from our existing waste streams, reduces the complexity of the end products that are being sold for the next stage of processing and can help get metals back in circulation faster. They do all of this, while providing the traceability that’s so essential in today’s critical mineral supply chains. VALIS is improving the business case for scrap processors today, while creating new opportunities for greater material recovery from the urban mine. It makes economic sense. It makes emissions sense. And yes, it makes material sense. That’s the circular economy.

About Closed Loop Ventures Group at Closed Loop Partners

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.

About VALIS Insights

VALIS Insights is building AI-powered software that makes recycling more profitable, material supply chains more sustainable and closes the loop on a circular economy for metal fabrication. With VALIS technology metal recyclers gain visibility into their material quality and make data-driven process decisions to extract more value. Founded in 2022 by experts in metal recycling and data science, VALIS is dedicated to delivering the software and data solutions needed across the recycling value chain to ensure the materials of yesterday are properly recovered for the manufacturing of tomorrow. For more information visit https://www.valisinsights.com/.

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.