Textile-to-textile recycler Circ has raised $25 million from backers including investment firm Taranis and Zara-owner Inditex, as it looks to bring its recycling technology to commercial scale.
The over-subscribed funding round comes at a fraught moment for start-ups angling to cash in on the ability to turn old clothes back into raw materials. Though increasing the volume of recycled textiles on the market is important to help big brands meet incoming sustainability regulations and their own consumer commitments, commercial and technical difficulties have derailed efforts by first movers and shaken confidence in the sector over the last year.
Virginia-based Circ’s new funds will be focused on avoiding pitfalls that have tripped up earlier movers. The money will go towards detailed engineering work to fine-tune plans for a commercial-scale plant the company hopes to break ground on in the next 12 to 18 months, as well as expanding the company’s commercial team. It expects to fund construction of its plant factory partly with debt, which means signing long-term purchase agreements with brands to give banks confidence that there’ll be a market for the production they’re financing.
“That’s not a muscle the fashion industry has,” said Circ chief executive Peter Majeranowski. Big brands typically source on a seasonal basis and sign contracts with the factories that sew their clothes, not farmers that grow cotton or chemical plants producing the ingredients for polyester. But that’s the part of the supply chain textile-to-textile recyclers sit in. “We have to work on building out that supply chain and connecting all those dots,” Majeranowski said.
If it scales, Circ’s technology promises a solution to a tricky challenge for the fashion industry. The process it’s developed is capable of recycling clothes made from cotton and polyester blends. But the widely-used combination is more difficult to recycle than pure cotton or polyester products.
The company is hoping its newest investor, Taranis, can help smooth the path to industrial production. The fund is owned by oil and gas company Perenco Group and brings experience developing complex engineering projects. It’s a “fund built from the ground up with the idea of bringing large-scale project expertise to its portfolio,” said Majeranowski. “Not a lot of funds set up that way.”
The investment is the latest sign of emerging interest from industrial players in the textile-to-textile recycling space.
Meanwhile, the political climate is adding a fresh layer of uncertainty for start-ups. For instance, moves to roll back support for clean tech in the US mean it is now very unlikely Circ will build its first industrial plan in the country, Majeranowski said.
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