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.

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.

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. 

USA & CANADA, October 21, 2024: The Compostable Field Testing Program (CFTP) and Closed Loop Partners’ Center for the Circular Economy are pleased to announce the launch of the CFTP’s much-anticipated data-sharing website, offering public access to detailed results from compostable packaging field testing over the last decade, through a dynamic interactive dashboard.

The CFTP’s new platform allows users to explore compostable product disintegration data with an unprecedented level of detail, helping composters, policymakers, regulatory agencies, brands, packaging manufacturers, researchers and consumers evaluate the potential of and opportunities for compostable packaging, and advance the practice of field testing.

The launch of the database is made possible through data donated from the Composting Consortium, an industry collaboration managed by Closed Loop Partners’ Center for the Circular Economy. This data comes from the Consortium’s groundbreaking study in 2023 which analyzed the disintegration of over 23,000 units of compostable packaging in the largest known field test of certified, food-contact compostable packaging conducted in North America. The CFTP provided support on field testing methodology, logistics and data analysis for this study. They also provided test items from their baseline sample kit, unlocking a larger sample set for data collection.

Data donated from the Consortium allowed CFTP to hit its critical anonymization threshold to open-source field testing data collected over the last decade. This marks a milestone for the composting industry, filling a historical data gap on compostable packaging disintegration in-field and providing access to a necessary baseline to inform improved recovery.

“The Composting Consortium’s goal is to support the recovery of compostable packaging, ensuring that the material disintegrates in real world conditions and brings value to composters and the organics stream. Field testing compostable packaging plays a key role in achieving this goal, and was a top priority for the Consortium in 2023, alongside characterizing contamination at compost sites,” says Caroline Barry, Program Manager at Closed Loop Partners’ Center for the Circular Economy. “CFTP played an instrumental role in the success of our disintegration study, and we’re thrilled to share data for their platform, providing the industry with insights that help move the needle on compostable packaging recovery.”

“We had to hit a critical threshold of data and repeated testing under certain conditions to be able to publish the data we’ve been collecting over the last 10 years,” says Emily McGill, Program Director of the Compostable Field Testing Program. “Now, with the data from the Composting Consortium’s disintegration study, we have not only more product disintegration data, but more results on the composters’ operating conditions that provide a crucial link to understanding product breakdown and refining field test methods.”

The collaboration between the organizations has enabled both to share valuable insights into the factors that affect compostable product breakdown, offering practical data to support better product design, composting practices and regulatory standards. The impacts of the Composting Consortium’s disintegration study extend beyond this initial data release. The Composting Consortium recently launched its Composter Innovator Program and Municipal Partner Platform, sharing insights and enabling collaboration to advance the circularity of food waste composting and food-contact compostable packaging.

Later this year, the CFTP will be releasing its refined methods for field testing and a field report, providing more valuable analysis and insights to inform thoughtful compostable packaging development and recovery in the U.S. and Canada.

Explore the Website

Visit the new website for key takeaways of the field testing results and to explore the interactive dashboard at compostabletesting.org.

Media Contacts:

Emily McGill, Program Director, Compostable Field Testing Program

[email protected]

Bea Miñana, Communications Director, Closed Loop Partners

[email protected]

About the Compostable Field Testing Program

The Compostable Field Testing Program is a non-profit research initiative dedicated to providing methods and materials to conduct field testing to composters across North America and beyond. Operating since 2016 as a collaborative venture between Compost Research & Education Foundation and its partner BSIbio, the CFTP provides a standard test kit and a customizable protocol for the common ‘mesh bag method’. When participating facilities share back their results, this data is collected by the CFTP, aggregated and anonymized for eventual public release in an online database. By helping composters evaluate and report on the real-world performance of compostable products, the program provides valuable data to support sustainable product development and composting practices.

About the Center for the Circular Economy at Closed Loop Partners

Closed Loop Partners is a firm at the forefront of building the circular economy. The company is comprised of three key business segments. Closed Loop Capital Management manages venture capital, buyout and catalytic private credit investment strategies on behalf of global corporations, financial institutions and family offices. Closed Loop Builders is an operating group that incubates, builds and scales circular economy infrastructure and services. The Center for the Circular Economy (‘the Center’) is the innovation arm of Closed Loop Partners. The Center executes research and analytics, unites organizations to tackle complex material challenges and implement systemic change that advances the circular economy. The Center’s expertise spans circularity across the full lifecycle of materials, connecting upstream innovation to downstream recovery infrastructure and end markets. Learn more about the Center’s work at https://www.closedlooppartners.com/the-center/

About the Composting Consortium

The Composting Consortium, managed by the Center for the Circular Economy at Closed Loop Partners, is a multi-year industry collaboration on a mission to build a world where organics are kept in circulation. The Consortium advances composting infrastructure and the recovery and processing of food-contact compostable packaging and food scraps in the U.S., to reduce food waste and mitigate climate impact. The Consortium brings 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. Through in-market tests, deep research and industry-wide collaboration, the Consortium is laying the groundwork for a more robust, resilient composting system that can keep food waste and compostable packaging in circulation. For more information, please visit www.closedlooppartners.com/composting-consortium/

October 23, 2024, New York, NY — Today, the Consortium to Reinvent the Retail Bag, an industry collaboration managed by Closed Loop Partners’ Center for the Circular Economy, announced a renewed collaboration with many of the world’s leading retailers, expanding its groundbreaking work to eliminate single-use bag waste.

Retailers Target, CVS Health, The Kroger Co., Dollar Tree, Family Dollar, Meijer and Walmart are renewing their long-standing commitment in the Consortium, focusing on implementing more sustainable and convenient solutions to eliminate single-use retail bag waste. Building on four years of collaborative work and extensive in-market tests and research, this strengthened commitment will allow the Consortium to continue scaling proven bag waste reduction strategies.

Highlighting the successes of the last four years and charting a path forward for potential impact, the Consortium is also releasing a new report, Sparking a National Culture Shift to Reduce Plastic Bag Waste. The report shares findings from the Consortium’s largest in-market reusable bag tests in 2023, which spanned 160 retailers and 375+ stores of all sizes across Denver, Colorado and Tucson, Arizona. Through the tests, retail stores encouraged consumers to develop the habit of bringing their bag or opting to go without one, resulting in nearly 5% fewer single-use plastic bag transactions. This equated to the potential elimination of up to 9.5 million bags annually across the two test geographies, demonstrating the impact of supporting customers at different stages of their journey to reuse a bag or go without one.

Read the full report

The findings from the Consortium’s 2023 in-market tests serve as a blueprint for the Consortium’s upcoming work to scale bag waste reduction strategies. By acting together to advance solutions that support customers and avoid waste, the Consortium aims to achieve positive environmental impact and minimize unintended consequences.

“100 billion single-use plastic bags are used in the U.S. every year. From the Consortium to Reinvent the Retail Bag’s work over the last four years, we know that retailer collaboration and customer engagement are critical to making single-use bag waste a thing of the past. The Consortium is proud to bring retail industry leaders together in a renewed commitment to making circular strategies a reality on the ground. As we expand from ideation to implementation of solutions that support customers and reduce single-use bag waste, we aim to drive a cultural change toward reduction and reuse,” says Kate Daly, Managing Director and Head of the Center for the Circular Economy at Closed Loop Partners.

The Consortium’s continued collaboration signals the collective commitment of many retail industry leaders to implement tested solutions that move the needle toward zero waste goals and the importance of working together to achieve these. As policy around bags gains momentum in the U.S. and new solutions are needed to address the single-use bag waste crisis, the Consortium will share legislative best practices gathered from its holistic assessment and continue identifying, testing and implementing new innovative solutions.

“We are proud of the shared progress achieved with the Consortium and across the retail industry over the past four years, meeting shoppers where they are with accessible, adoptable alternatives to single-use plastic bags,” said Agata Ramallo Garcia, vice president, head of enterprise sustainability at Target. “The partnerships we continue to forge through the Consortium demonstrate the power and need for collaboration in order to innovate and scale solutions that will meaningfully reduce single-use plastic bag waste.”

“Reducing single-use bag impacts is a positive step for both the environment and our health,” said Jenny McColloch, vice president of sustainability and community impact at CVS Health. “We are excited to move forward with the next phase of work with the Consortium and come together to drive innovation across our sectors, especially as packaging policies continue to evolve and consumer experiences vary from retailer to retailer.”

“We believe that learning and working collaboratively is the best way to reduce the number of single-use plastic bags in the U.S.,” said Lisa Zwack, Head of Sustainability at The Kroger Co. “By assembling a number of major retailers in the initial phase of this work, the Consortium laid a foundation for innovation and systems change. We look forward to extending this collective effort to create more circular, waste-free systems that support our customers and our stores.”

With deepened collaboration and reach across the retail industry, the Consortium is poised to scale bag waste reduction and reuse strategies that enable behavior change and support a broader cultural shift to eliminate single-use bag waste.

Retailers of all sizes are invited to join the Consortium’s multi-year collaboration to engage their customers and communities, advance their sustainability goals and co-create a waste-free retail future.

Interested in learning more about the Consortium to Reinvent the Retail Bag? Learn more here.

Interested in reading the Consortium’s latest report? Visit here.

About the Center for the Circular Economy at Closed Loop Partners

The Center for the Circular Economy is the innovation arm of Closed Loop Partners, a firm at the forefront of building the circular economy. The Center executes research and analytics, unites organizations to tackle complex material challenges and implements systemic change that advances the circular economy. The Center for the Circular Economy’s expertise spans circularity across the full lifecycle of materials, connecting upstream innovation to downstream recovery infrastructure and end markets. Learn more about the Center for the Circular Economy at closedlooppartners.com/the-center/

About the Consortium to Reinvent the Retail Bag

The Beyond the Bag Initiative, launched by the Consortium to Reinvent the Retail Bag, aims to identify, pilot and implement viable design solutions and models that more sustainably serve the purpose of the current retail bag. Closed Loop Partners’ Center for the Circular Economy manages the Consortium, with Target, CVS Health and The Kroger Co. as Strategic Leads, and Dollar Tree, Family Dollar, Meijer and Walmart as Supporting Partners. Learn more about the Consortium here.

October 21, 2024, New York, NY – Today, Closed Loop Partners’ portfolio company, Sage Sustainable Electronics (“Sage”), announces their acquisition of Relectro, a national provider of electronics repair, refurbishment and logistics services. The acquisition expands Sage’s offerings into repair services, bolstering the company’s existing IT Asset Disposition (ITAD) services. The acquisition was completed through a follow-on investment from Closed Loop Partners’ buyout private equity group focused on acquiring and growing platforms to advance a circular economy.

Closed Loop Partners first joined forces with Sage in 2023 as a majority shareholder in the company, aiming to accelerate the company’s growth and strengthen its position as a leading provider of sustainable ITAD services in North America. Since then, Sage has been at the forefront of advancing a circular economy for electronics, providing secure reuse and recovery solutions to businesses seeking to sustainably dispose of their IT assets.

Today, Sage faces an evolving IT industry. Devices are being replaced much more often, with an average refresh cycle by IT departments of two years for smart phones, four years for laptops and five years for printers. Amidst increasing demand for repair services to extend the lifecycle of electronic devices, Sage completed its acquisition of Relectro to provide a comprehensive suite of solutions that can keep more devices in circulation.

Since 2011, Relectro has specialized in electronics repair, focused on refurbishing products for continued use before disposal. The company provides repair-on-demand services to leading warranty repair firms, insurance firms, mobile device providers and more. With a repair rate of over 25,000 assets per year across wireless handsets, laptops, tablets and other devices, Relectro is positioned to add significant capacity for advanced repair services to Sage’s platform.

“This marks an important milestone for Sage as we expand our platform with Relectro. Their wide-ranging partner network and deep technical expertise are key assets to our growth, adding strategic expertise to our platform,” said Bob Houghton, CEO of Sage Sustainable Electronics. “Relectro enables us to expand depot repair services for enterprise clients––extending lifecycles, reducing costs and increasing sustainability.”

The geographical proximity of the two companies creates more opportunity for a fully integrated platform of repair services, asset management, reverse logistics and recycling services for the wireless and smart device technology industry. Sage recently announced their fourth national repurposing center in Montgomeryville, PA, which is located less than 10 miles away from Relectro’s 40,000 square foot facility in Telford, PA.

“We look forward to this next phase of growth as a part of Sage Sustainable Electronics’ platform,” said Brian Itterly, Founder & CEO of Relectro. “For over a decade, Relectro has provided critical repair services for electronics––a key part of keeping devices in circulation for longer. Today, our repair and refurbishment services complement and build on Sage’s reuse and recovery services, offering a wider range of solutions for businesses across the country.”

This is the seventh investment to date from Closed Loop Partners’ buyout private equity group, employing a buy-and-build strategy to partner with companies and scale platforms and enabling technologies across plastics & packaging, organics, circular technology and textiles to develop, accelerate and modernize circular supply chains and recycling & reuse infrastructure.

The investment to support Sage’s acquisition of Relectro builds on Closed Loop Partners’ robust portfolio of investments to advance circularity for electronics––one of the key focus areas of the firm, alongside packaging, textiles, organics and more. Closed Loop Partners’ broader portfolio of investments in electronics circularity spans IT asset management and disposition, disassembly and remanufacturing, collection and reuse, and end-of-life electronics recycling.

“Closed Loop Partners is proud to back Sage Sustainable Electronics’ acquisition of Relectro, laying the foundation for an expanded platform with strong operational processes, complementary geographical locations and continued progress toward electronics circularity,” said Jackson Pei, Co-head of Closed Loop Partners’ buyout private equity strategy. “We look forward to supporting Sage’s continued growth with their now expanded IT Asset Disposition and repair services.”

Following the acquisition, Sage will continue to grow its services and geographical footprint, positioning the company for wider reach to keep more electronics in circulation and out of landfills.

To learn more about Closed Loop Partners, please visit here.

To learn more about Sage Sustainable Electronics, please visit here.

To learn more about Relectro, please visit here.

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.

Closed Loop Partners’ buyout private equity strategy captures this market opportunity for the circular economy by identifying solutions, originating innovative opportunities, and building and scaling platforms and enabling technologies across plastics & packaging, organics, circular technology and textiles to develop, accelerate and modernize circular supply chains and recycling & reuse infrastructure.

About Sage Sustainable Electronics

Sage Sustainable Electronics, based in Columbus, Ohio is a leading provider of IT Asset Disposition (ITAD) services, safely and securely refurbishing used IT assets for another life. Founded in 2014 by Bob Houghton, Sage’s platform has expanded to include four national repurposing facilities across three states, processing nearly one million assets annually. Sage extends the useful life and increases the recovery value of IT assets for its clients, which include Fortune 100 companies across various industries, including finance, healthcare and defense.

About Relectro

Relectro is a national leader in electronics repair, refurbishment, asset management and electronics recycling. Founded in 2011, Relectro handles the entire device lifecycle of electronic mobile devices consisting of smartphones, computers, laptops, tablets, smartwatches, gaming, IoT and various other mobile electronics. It operates a R2V3 certified state of the art and full-service depot facility working with many insurance, extended warranty, EDU, enterprise and asset disposition partners in the U.S.

 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:

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[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