IMP Matrix Rating: C4
What: Closed Loop Ventures II is an early-stage venture capital fund working to build the circular economy – a system designed to eliminate waste and reutilize materials – by investing in artificial intelligence, robotics, material science, distributed manufacturing, advanced supply chain technology, and transparency tools across four key sectors: plastics and packaging, food and agriculture, textiles and apparel, and supply chain efficiency and logistics.
Who: The costs of our current “take-make-waste" linear economy are severe and wide-ranging, from the carbon emissions and loss of biodiversity through deforestation to the depletion of marine food sources due to plastic waste. Circular business models, in contrast, decouple economic growth from resource consumption, thereby increasing the efficiency and effectiveness of businesses while designing out waste and accelerating society toward a sustainable future.
How Much Impact: Closed Loop Ventures tracks four core impact KPIs: greenhouse gas emission mitigation, diversion of materials from landfill, efficient water usage, and quality job creation. It produces best-in-class impact reporting. The 2021 impact was: 195k tonnes of CO2 emissions avoided, 415k tonnes of materials impacted, 514 million gallons of water saved, and 261 jobs created. The same measures since inception of the Fund I strategy are 570k, 698k, 1.09 billion, and 381 respectively.
Our Contribution: We invested at a time when the minimum viable fund size was not guaranteed, thereby taking on some fundraising risk and helping the fund eventually achieve and surpass its size of over US$50 million.
Impact Risk: Some products of portfolio companies may be out of reach for many customers due to the higher costs associated with the research and development required to produce the sustainable variants of otherwise cheaper mainstream products. Closed Loop Ventures acknowledges that products are often not at a price competitive point at the time of investment, and they mitigate the risk of exclusivity by analyzing the potential for eventual price competitiveness.
Sample Investment: Dimpora, a chemical company that develops sustainable and non-harmful membranes for apparel.