Circularity Capital’s second fund raises €215m

Ian Nolan

Edinburgh-based Circularity Capital, the “circular economy” European growth investor, has announced the oversubscribed final close of its second fund at €215 million.

The firm said Circularity European Growth Fund II (CEGF II) is the “largest specialist circular economy private equity fund across the globe.”

It said investors in CEGF II are comprised of blue-chip institutional investors including pension funds, fund of funds, insurance companies and family offices across Europe, UK and North America.

Circularity said: “CEGF II will continue Circularity Capital’s dedicated strategy to invest into circular economy growth-stage businesses in Europe.

“According to analysis by Accenture, the circular economy represents a $4.3 trillion value creation opportunity globally, while having the potential to reduce greenhouse gas emissions by 39%.

“The firm is focused on making investments into businesses whose circular economy characteristics are their source of sustainable competitive advantage.

“Target companies aim to decouple business growth from intense resource utilisation, generating both economic and environmental benefits.

“Example strategies preserve or extend asset lives, improve the utilisation of assets and/or enable materials and products to be used over multiple cycles.”

“To date Circularity Capital has made eight investments from Fund I and two investments from Fund II.

“Investees include ZigZag, a multi-award-winning SaaS platform for eliminating retail returns wastage; sold by Circularity to NYSE listed Global Blue in March 2021; Shark Solutions, a global leader in advanced recycled PVB products, nominated as one of Bloomberg’s 50 Global Positive Change Leaders; and Grover, the leading consumer-tech subscription platform, which raised $330 million in equity and debt funding earlier this month, bringing the company’s valuation to over one billion US dollars.”

Circularity Capital founding partner Jamie Butterworth said: “We established Circularity Capital in 2015 with the conviction that businesses in the circular economy deserve a specialist investor with the right expertise, insight and network to ensure they achieve their full potential.

“We’ve invested heavily in building specialist capabilities for sourcing, selecting, and growing circular businesses and can now clearly see the benefits of this strategy.

“As our investment pipeline continues to grow in the quality and quantum, our larger Fund II represents the opportunity to double down on this strategy and continue to deepen our domain expertise.”

Circularity Capital’s team combines private equity and circular economy experience.

The current Circularity team has been bolstered with three new hires, taking the overall team to 11 professionals.

Deanna Zhang joins as investment director from European-focused mid-market PE fund L-GAM Advisers, Nicola Keen joins as operating principal from PA Consulting’s circular economy strategy consulting team, and Maximillian Bork joins as investment associate from KPMG Munich.

Circularity Capital founding partner Ian Nolan said: “We are seeing a very strong pipeline of investment opportunities across Europe, as demonstrated by our early deployments into Lendis GmbH and ReBike GmbH – both a great fit with our focus on backing businesses using the circular economy to drive a sustainable competitive advantage.

“As the domain expert in circular business models, we believe Circularity Capital is ideally positioned to support management teams in this field achieve their full financial and impact growth potential.”